ONE OF the strongest US payroll reports in months has raised hopes the economic recovery is leading to steady growth in jobs.
Non-farm payrolls rose by 192,000 in February – in line with market expectations – but hiring was spread across a broad range of industries, figures for previous months were revised up, and the unemployment rate fell again from 9 to 8.9 per cent.
Some of the rise was a bounce after January’s snowstorms but average hiring in the past three months rose to 136,000.
That is fast enough to keep up with population growth and start to lower the unemployment rate.
“The labour market recovery does appear to be on solid ground,” said Joshua Shapiro, chief US economist at MFR.
Signs of sustainable job creation make it highly unlikely that the Federal Reserve will expand its “QE2” programme of asset purchases beyond the $600 billion (€429 billion) due for completion by the end of June.
But job numbers are also unlikely to push the Fed towards early interest rate rises because wage growth – which affects inflation – was slow. Average hourly earnings rose by just one cent to $22.87 and the average work week was flat at 34.2 hours.
Manufacturing added 33,000 jobs as did construction; business services put on 47,000 jobs; healthcare created 40,000 positions and the hospitality sector took on 22,000 employees.
The further dip in the unemployment rate was especially encouraging because it suggests that the previous decline from 9.8 per cent last November was not just a statistical aberration.
But some clouds remain. Geoff Somes, senior economist at State Street Global Advisers in Boston, said the report was “good but not great” and there were still “signs of weakness”. Mr Somes also pointed to a further rise in the average duration of unemployment to 37.1 weeks. – (Copyright The Financial Times Limited 2011)
