The Economy

U.S. Beats Expectations With 242,000 Job Gain

The strong February jobs report suggests steady consumer spending "is bolstering demand and prompting employers to expand their workforces."
Katie Kuehner-HebertMarch 4, 2016

While other countries may be showing signs of a real slowdown, the U.S. continues to add jobs, with better-than expected gains in February.

Total nonfarm payroll employment increased by 242,000 in February, and the unemployment rate held at 4.9%, the Labor Department said Friday. Economists on average had expected 191,000 new jobs.

The employment-population ratio edged up to 59.8% over the month, and the labor force participation rate edged up to 62.9%. Moreover, job gains for both December and January were upwardly revised to add 30,000 more jobs than previously reported. Over the past three months, job gains have averaged 228,000 per month.

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“That pace indicates Americans are returning rapidly to the labor force, helped by steady consumer spending that is bolstering demand and prompting employers to expand their workforces,” the Washington Post wrote.

Bankrate.com senior economic analyst Mark Hamrick told the Post that the job reports indicate the financial markets’ “panic over a possible recession in the U.S. has been misplaced.”

Average hourly earnings for all employees on private nonfarm payrolls declined by 3 cents to $25.35, following an increase of 12 cents in January, the Labor Department said. Still, average hourly earnings have risen by 2.2% over the year.

The trend shows that employers are beginning to compete more aggressively for workers and raising pay as a result, Amy Glaser, a senior vice president at Adecco Staffing, said.

While Friday’s numbers bode well for another interest rate increase by the Federal Reserve, analysts doubt that will happen later this month.

Robert Kaplan, the president of the Federal Reserve Bank of Dallas, said Thursday that the fragility in the broader global economy is a reason for the central bank to tread carefully.

“The Fed needs to show patience in decisions to remove accommodation,” he said in a speech.

The U.S. has now posted 65 consecutive months of uninterrupted jobs gains. “Perhaps the most encouraging sign in the [February] statistics was evidence that people who had long been sidelined were being lured back to the job market,” the New York Times said, noting that the labor participation rate rose 0.2 percentage points to 62.9%.