U.S. stocks were trading higher on the data, while prices for U.S. Treasury debt fell.
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The US economy created 242,000 net jobs last month, while analysts had expected 190,000 new hires.
Now, the recovery is in its seventh year, the unemployment rate has dropped sharply to 4.9 percent and the private sector has chalked up 72 months of uninterrupted job gains, the longest streak on record.
Paul Ashworth, chief US economist for Capital Economics, said, “Overall, it’s clear that labor market conditions are still strong”. “The solid jobs report should allay recession fears”. More people look for work when they think jobs are easier to find. Still, labour-related costs increased solidly as companies employed more workers to raise output. The Fed hiked rates in December for the first time in almost a decade. Hourly earnings ticked down 0.1 percent last month, a frustrating performance for those who have been waiting for years for wage inflation to pick up steam.
Two-thirds of the new jobs were in the relatively low-paid hospitality, retail and health-service sectors, while the better-paying manufacturing and mining sectors continued to bleed jobs. However, she also said that adding 200,000 jobs a month would be necessary to lure back new workers who have dropped out. Over the a year ago, average earnings have risen 2.2 percent – only slightly faster than inflation. The measure bottomed out at 62.4 per cent in September-the lowest level since 1977-but has crept up steadily as more people joined the workforce. That was below the roughly 220,000 average monthly gain in 2015. The increases bolstered hopes that employers were raising pay to keep workers.
At 8:30 a.m. ET, the Bureau of Labor Statistics will publish its employment report for February.
Economists were searching for explanations because wages had begun picking up in recent months. “Our view remains that declining corporate profit margins will prompt aggressive cost-cutting and thus a slower trend for nonfarm payroll growth (most notably later this year and into 2017), which in turn will lead to a slower trend for consumer spending growth”, MFR, Inc. economist Joshua Shapiro wrote in an e-mailed analysis. Auto sales rose 7 percent over last February to 1.3 million vehicles, according to Autodata Corp. And the temp penetration rate – temp jobs as a percent of total employment – fell to 2.03% in February from 2.04% in January.
Troubles overseas have tempered US economic growth.
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Other parts of the world – from China and India to Europe and Latin America – are suffering from slowing growth. This reflects orders falling by the energy industry, depressed by low oil prices.
