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U.S. adds 236K jobs; unemployment falls to 7.7 percent
Question of the Day
The nation’s unemployment rate dropped to a four-year low of 7.7 percent last month as job growth accelerated to 236,000, the Labor Department reported Friday morning.
The job gains were registered widely throughout the economy, from accounting and computer design to construction and health care.
The 48,000 construction jobs added during the month were the most in six years and showed that the reviving housing sector is starting to produce the much-sought benefit of increased employment for long-idled workers in home-building, many of whom have been out of permanent work for five years or more.
A sizable 246,000 gains in private jobs offset a loss of 10,000 government jobs as governments at all levels continued to pare spending.
That trend is expected to continue this year with the federal government imposing across the board budget cuts of $85 billion.
Chris Williamson, chief economist at Markit, said job growth last month was surprisingly strong and reflects rising momentum in the business sector, although the job gains in previous months were revised lower by 15,000 and offset the good news somewhat.
“The economy is moving in the right direction and is weathering the storm of various fiscal headwinds it is currently facing with considerable resilience,” he said.
“The private sector is gathering momentum, but the sequester will slow growth temporarily,” said Nigel Gault, chief U.S. economist at IHS Global Insight.
With the private economy shifting into higher gear, the sequester “will not derail the economy,” he said, though it might shave about a half point off the growth rate this year.
“The housing market continues to improve across all dimensions” and is perhaps the most significant new source of strength for the economy, he said. “Barring some external shock, a multi-year housing recovery lies ahead.”
The pickup in the job market brought a small dividend to beleaguered workers suffering from stagnant wages, with average hourly earnings jumping during the month to $23.82.
That brought the yearly gain in wages to slightly over 2 percent — still historically low for an economy that has been recovering for nearly four years.
In another sign of strength, the average workweek also increased to 33.8 hours from 33.6 in January.
“Today’s employment report indicates that the trickle down monetary policies of the Federal Reserve are beginning to work,” said Jerry Jasinowski, former president of the National Association of Manufacturers.
So far, the near-zero interest rates engineered by the Fed have mainly served to ignite a rally in the stock market that drove the Dow Jones Industrial Average to record highs this week, he noted.
But the jobs reports shows that the good times may be starting to spread to the larger economy — an outcome long sought at the Fed, he said.
With job gains in February sharply higher than the Wall Street consensus forecast of 165,000, the labor report added to the strong rally in stocks on Friday.
The Dow shot up 82 points to 14,409 shortly after the open of trade on the New York Stock Exchange.
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