The US economy created 295,000 jobs in February, up from an average gain of 266,000 over the past 12 months, according to the Labour Department report.
The unemployment rate dropped from 5.7 per cent in January to 5.5 per cent, the lowest level since mid-2008. 8.7 million Americans were looking for work. The number of unemployed people fell by 1.7 million over the past year.
January’s job gains were revised down from 257,000 to 239,000. December’s gains were unrevised, at 329,000.
The number of long-term unemployed – those Americans who have been out of work for 27 weeks or more – fell by 1.1 million in the 12 months to end-February.
The labour force participation rate – the share of working-age people either employed or looking for a job – dropped slightly, from January’s 62.9 per cent to 62.8 per cent.
Jobs growth was strong across most sectors. The leisure and hospitality sector created 66,000 new positions. Education and health services added 54,000 jobs. Professional and business services put on 51,000 new positions. Employment in health care and social assistance rose by 32,800. The retail sector gained 32,000 jobs. Employment in construction increased by 29,000, despite the cold weather.
Wage growth remained sluggish. Average hourly earnings for all employees on private non-farm payrolls rose 3 cents on the month to 24.78 dollars. Wages were up 2 per cent from a year earlier. The average workweek held steady for the fifth straight month, at 34.6 hours.
Given the fall in unemployment, the Federal Reserve is more likely to raise interest rates from the current 0 per cent-0.25 per cent levels around mid-2015. Janet Yellen, the Fed chairwoman, said last week that the policy-making Federal Open Market Committee would start tightening monetary policy when it was “reasonably confident” that inflation will move back to the central bank’s annual goal of 2 per cent over the medium term.
The consumer price index (CPI) fell 0.1 per cent in January from a year earlier, according to data from the Bureau of Labor Statistics. The core CPI, which strips out the cost of volatile items such as food and energy, rose 1.6 per cent on an annual basis. The Fed’s 2 per cent inflation goal is based on the personal consumption expenditures price index, which has not been at 2 per cent since 2012.
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