Business

US payrolls up solidly, jobless rate at 8.3pc

WASHINGTON, March 9 — US employment grew solidly for a third straight month in February, a sign the economic recovery was broadening and in less need of further monetary stimulus from the Federal Reserve.

Employers added 227,000 jobs to their payrolls last month, the Labour Department said today, while the unemployment rate held at a three-year low of 8.3 per cent.

This is the first time since early 2011 that payrolls have grown by more than 200,000 for three months in a row. — Reuters picThis is the first time since early 2011 that payrolls have grown by more than 200,000 for three months in a row. — Reuters picIt marked the first time since early 2011 that payrolls have grown by more than 200,000 for three months in a row — bolstering President Barack Obama’s chances for re-election.

The economy created 61,000 more jobs in December and January than previously thought, and the jobless rate held steady even as more people returned to the labour force.

Although the job market is gaining some muscle, the pace of improvement remains too slow to do much to absorb the 23.5 million Americans who are either out of work or underemployed.

Fed Chairman Bernanke last week described the labour market as “far from normal” and said continued improvement would require stronger demand for US goods and services.

Still, he suggested the outlook would have to deteriorate for the US central bank to launch another round of bond buying to drive interest rates lower. Officials said in January they expected growth this year to be no higher than 2.7 per cent.

The jobs report, which sets the tone for financial markets worldwide, added to the list of data highlighting the US economy’s underlying strength.

It also provided a hopeful sign for the global recovery at a time that growth is slowing in China and the euro zone appears to be sliding into recession. The jobless rate in the 17-nation euro zone area rose to 10.7 per cent in January, the highest since the euro started circulating in 2000.

Numbers good for Obama

In contrast, the US unemployment rate has dropped 0.8 percentage point since August, providing some relief to Obama, who faces an election battle in which the economy has been centre stage.

Economists predict the jobless rate could fall below eight per cent by November, even if the recent firming in the jobs market lures Americans who have given up the search for work back into the labour force.

The labour force participation rate — the percentage of working-age Americans either with a job or looking for one — rose to 63.9 per cent from 63.7 per cent in January.

Today’s numbers bolster President Barack Obama’s chances for re-election. — Reuters picToday’s numbers bolster President Barack Obama’s chances for re-election. — Reuters picThe separate survey of households that is used to measure the jobless rate showed even brisker hiring in February.

While some parts of the jobs market have benefited from unseasonably warm winter weather, economists say a genuine improvement is under way, even though they expect a slight pull back in March.

Private companies again accounted for all the job gains in February, adding 233,000 positions. Government employment fell a modest 6,000, declining for a sixth straight month.

Manufacturing, which in January recorded the largest gain in a year, dominated job creation in February, hiring 31,000 new workers. The sturdy job gains reflect stepped up auto production.

Most auto companies are taking on new workers and adding shifts and overtime to meet pent-up demand after production was disrupted early last year following the tsunami and earthquake in Japan.

Average hourly earnings increased three cents in February. Average hourly wages have increased 1.9 per cent in the 12 months through February.

The overall workweek held steady at 34.5 hours — holding at the highest level since August 2008.

Earnings are being closely watched for signs of wage inflation after unit labour costs grew much more strongly than initially thought in the third and fourth quarters of 2011.

Outside manufacturing, construction payrolls fell 13,000, the first decline in four months.

Although hiring has quickened, the economy faces persistent long-term unemployment. In February, about 43 per cent of the 12.8 million unemployed Americans had been out of work for more than six months. — Reuters

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