Washington / AFP
US employers defied a global slowdown and pumped up hiring in February, fending off worries about financial market turmoil and the oil industry crash.
The Labour Department reported that companies and government authorities added a much better-than-expected 242,000 jobs last month, and the figures for the previous two months were revised higher.
Steady growth in consumer spending underpinned the strong jobs gains in the retail and health-care sectors, easily offsetting the slowdown in international trade and huge oil company layoffs.
The unemployment rate meanwhile held steady at 4.9 percent, the lowest since February 2008 at the beginning of the Great Recession.
The new data underscored the resilience in the US economy amid worries that it was beginning to stall early this year, though analysts still expect growth to ease in the coming months.
Obama: ‘Pretty darn great’
The report came as the 2016 race to succeed President Barack Obama heats up with Republican White House hopefuls repeatedly charging that the US economy is sickly.
Citing the fact of unbroken jobs gains for 72 straight months, Obama countered on Friday that the country “is showing the kind of strength and durability that makes America’s economy the envy of the world, despite the enormous headwinds.”
“There seems to be an alternative reality out there, from some of the political folks, that America’s down in the dumps,” he told reporters.
“It’s not. America is pretty darn great right now.”
But the details of the data raised a challenge to the Federal Reserve, which has been looking for more concrete signs of tightening in the labor market — and by extension inflationary pressure — to justify plans to continue raising interest rates this year.
While overall hiring was unexpectedly strong, 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.
The number of people forced to work part-time because of the lack of full-time positions hardly budged. And there was a rise in the number of long-term unemployed
Meanwhile, average wages, which had begun to pick up healthily over the past few months, fell in February, as did average hours worked.
Year-on-year wages were up a modest 2.2 percent, when they had been trending at around 2.5 percent in previous months.
On the other hand, the data indicated that new hiring pulled back into the jobs market hundreds of thousands of people who, discouraged, had dropped out.
The employment-to-population ratio rose by 0.2 percentage point to 59.8 percent, the highest level in nearly seven years, and up from 59.3 percent a year ago.
What it shows, analysts said, is that after years of weakness the labor market is proving able to absorb both newcomers and returnees.
Analysts said the slowdown in wage growth is likely.
“There are thus in our view no signs whatsoever that the US labor market has been losing any momentum,” said economist Harm Bandholz of UniCredit.
Nevertheless, analysts said they believed the Fed will still hold off from raising interest rates in its mid-March policy meeting.
“Current signs of rising inflationary pressures and a tightening labor market need to be viewed alongside indications that the pace of economic growth may be slowing, and possibly sharply,” said Chris Williamson of Markit.
“The big question will be the extent to which the Fed heeds the warning lights flashing in the background.”
Yet the jobs data raised the chance of a rate hike by midyear.
“In view of the latest signals, we expect the Fed to wait until June before they raise rates again,” said economist Kurt Karl of insurer Swiss Re.
A rise in US mid-term bond yields suggested markets agree. Meanwhile on Wall Street, the S&P 500 finished up 0.3 percent and the dollar slipped 0.4 percent to $1.0996 per one euro.