US figures on jobs add to evidence of recovery
THE US labour market has boosted the re-election chances of President Barack Obama after a third consecutive month of strong jobs growth offered further evidence of a robust economic recovery.
Non-farm payrolls for February rose by 227,000, slightly ahead of Wall Street expectations, while the unemployment rate held steady at 8.3 per cent, according to data released yesterday by the Bureau of Labor Statistics.
The sustained strength of the labour market, which has generated more than 200,000 jobs each month since December, increases the chances that the US economy will grow more than 2 per cent this year.
“A very strong employment report, coupled with a shift higher in credit generation, points to trend GDP growth of close to 3 per cent and it introduces an emerging conundrum for [the US Federal Reserve]: how to keep [interest] rates low for longer,” said Eric Green at TD Securities in New York.
“We’re still recovering from the worst economic crisis in our lifetimes,” Mr Obama said on a visit to a Rolls-Royce factory in Virginia.
“But here’s the good news: over the past two years our businesses have added over four million new jobs.”
Republicans have reluctantly acknowledged the economy’s turnaround, but argue that job growth would be stronger if it were not for Mr Obama’s policies.
“Today’s report provides some encouragement for millions of families and small businesses who continue to struggle in this economy, but unemployment remains far too high,” said John Boehner, Republican speaker in the US House of Representatives.
“It is a testament to the hard work and entrepreneurship of the American people that they are creating any jobs in the midst of the onslaught of anti-business policies coming from this administration,” he added.
The February data were marked by the first signs since 2008 that workers previously discouraged by dismal job prospects are starting to re-enter the labour market.
The share of the US population taking part in the labour force rose from 63.7 to 63.9 per cent.
While the unemployment rate has fallen rapidly since December, when it was 9 per cent, optimism was tempered by the lack of workers looking for jobs again.
Their return in February suggests the recession has not pushed them out of the labour force for good.
Revisions to previous data also revealed an extra 61,000 jobs.
Hourly wages increased by 1.9 per cent over the previous year, while the median time that people remain unemployed fell from 21.1 to 20.3 weeks.
Hiring was especially strong in the service sector, with healthcare adding 61,000 jobs, business services 82,000 positions and the leisure and hospitality sector 44,000.
A drop in construction jobs may have reflected a return to normal winter levels after unusually warm weather in January. – Copyright The Financial Times Limited 2012