05/03/2011
US payrolls rise, jobless rate falls
Rising crude oil prices also overshadowed the data, helping to push US stocks down
Hiring by US employers hit a nine-monthhigh in February and the jobless rate slipped to a nearly two-year low of 8.9 percent, showing the economy is kicking into a higher gear.
Employment increased 192,000, the Labor Department said on Friday, in line with expectations, in what was partly a bounce back from a weather-depressed January. Data for December and January was revised to show 58,000 more jobs created than previously estimated...The unemployment rate fell to its lowest since April 2009, from 9.0 percent in January.
Federal Reserve officials, who meet on March 15, will likely welcome February’s sturdy employment report, but probably still regard the pace of job creation as too slow to change the US central bank’s ultra-easy monetary policies.
The last time payrolls grew so much was last May, when the government’s hiring of temporary workers for acensus boosted payrolls hugely.
As in previous months, the private sector accounted for all the job gains in February, with an addition of 222,000 positions — the largest gain since April 2010. That was up from 68,000 in January.
Though the employment report showed gains across the board, with the exception of government, some investors were a little disappointed as they had anticipated an even bigger increase in payrolls. Rising crude oil prices also overshadowed the data, helping to push US stocks down.
Prices for US government debt rose, while the dollar slipped against a basket of currencies.
The jobless rate has dropped 0.9 percentage point since November. The rate is derived from a survey of households, while the job creation figure comes from a separate survey of employers. The household survey showed more people were employed in February.
Economists believe the Fed will want to see payroll gains in excess of 200,000 for at least six to nine months and a significant decline in unemployment before starting to withdraw its massive monetary support from the economy.
A surge in crude oil prices above $100 a barrel due to turmoil in the Middle East and North Africa represents a new headwind for the economy.
But Fed Chairman Ben Bernanke this week said higher oil prices were unlikely to steal much from growth or spark broader inflation, as long they are not sustained.
With the jobless rate far from its natural 5-6 percent level and inflation still short of the Fed’s target of close to 2 percent, analysts expect the Fed to complete its $600 billion government bond-buying program through June to help the economy.
Payrolls in the goods-producing industries saw a weather-related bounce of 70,000, with construction increasing 33,000 after shedding 22,000 jobs in January. Manufacturing, a sector that is powering the recovery, added 33,000 jobs.
Government employment fell 30,000, contracting for a fourth straight month, pulled down by state and local governments, which are under heavy budgetary pressures.
The average work week was steady at 34.2 hours. Average hourly earnings rose one cent.
A separate report showed new orders received by US factories leaped 3.1 percent in January, marking their biggest increase since September 2006 on a massive surge in aircraft orders.
