U.S. added 235,000 jobs in February
WASHINGTON — U.S. employers added a robust 235,000 jobs in February and raised pay at a healthy pace, making it all but certain that the Federal Reserve will raise short-term interest rates next week.
Friday’s jobs report from the government made clear that the economy remains on solid footing nearly eight years after the Great Recession ended.
The unemployment rate fell to a low 4.7 percent from 4.8 percent, the Labor Department said. More people began looking for jobs in February, a sign that they’ve grown confident about their prospects for finding work. Hiring was strong enough to absorb those new job seekers as well as some of the previously unemployed.
The gains in hiring and pay, along with better consumer and business confidence since the November election, could lift spending and investment in coming months and accelerate economic growth. Americans are buying homes at a solid pace, and manufacturing is rebounding, in part because of improving economies overseas.
“It’s hard to find much to dislike in the February jobs report,” said Michael Feroli, an economist at JPMorgan Chase, said.
Investors responded by lifting stock prices, with the Dow Jones industrial average up a modest 29 points in midday trading.
The February jobs data likely provides the final piece of evidence the Fed needs to raise rates next week for the third time in 15 months. The Fed’s inclination to tighten borrowing rates reflects how far the economy has come since the central bank cut its benchmark short-term rate to zero in 2008 and kept it there for seven years to support a fragile economy.
In December, Fed policymakers forecast that they would raise rates a total of three times this year. Those increases could lead eventually to higher loan rates for homes and cars as the economy further solidifies its gains. Economists said Friday’s hiring data increases the probability of additional rate hikes.
“Job growth continues to offer a positive reflection on underlying economic conditions,” said Russell Price, an economist at Ameriprise Financial. “There are few factors more important to consumers than jobs. Overall, consumers are in great shape to support an accelerated pace of economic growth.”
Friday’s report was the first to cover a full month under President Donald Trump. During the presi- dential campaign, Trump had cast doubt on the validity of the government’s jobs data, calling the unemployment rate a “hoax.” But just minutes after Friday’s report was released at 8:30 a.m. Eastern time, Trump retweeted a news report touting the job growth.
Last month’s hiring was boosted by 58,000 additional construction jobs, the most in nearly a decade and three times that sector’s average in the previous three months. Unseasonably warm weather likely inflated that figure, economists said. Last month was the second-warmest February since 1895.
If warm weather did help elevate construction hiring last month, it might also have the effect of subtracting from job growth that would normally occur in early spring.
“There will probably be some weather payback in March,” Ted Wieseman, an economist at Morgan Stanley, said in an email.