U.S. employers shook off some severe winter weather and added a surprisingly strong 295,000 net new jobs in February while the unemployment rate fell to a post-Great Recession low of 5.5%, the Labor Department said Friday.
The jump in job creation exceeded economists’ forecasts and was an improvement over January’s 239,000 jobs. But the increase was offset somewhat by a downward revision in December’s and January’s figures by a total of 18,000 jobs.
Wage growth continued to be slow last month. Average hourly earnings rose by just 3 cents to $24.78 after an encouraging 12-cent increase in January.
For the 12 months ended Feb. 28, wages rose by only 2%, well above the low inflation rate but not nearly the level economists would like to see coming out of a deep recession.
Part of the reason the unemployment rate fell to its lowest level since May 2008 was that about 178,000 job-seekers dropped out of the labor force. That caused the labor force participation rate to tick down by a tenth of a percentage point to 62.8%, near a more-than-three-decade low.
Still, job growth has been strong over the past year. February was the 12th straight month in which the nation added at least 200,000 net new jobs, the best streak since 1994-95.
Job growth has averaged 266,000 during that period. The pace has improved recently, with the economy averaging 288,000 net new jobs from December through February.
“There has been no significant impact from the winter weather during the month,” said Gad Levanon, managing director for economic outlook and labor markets at the Conference Board. “As expected, the lower oil-price level is beginning to shrink employment in the mining industry, but it is not large enough to make a significant dent in the total number of jobs.
Employment by oil and gas extraction companies fell by 9,300 jobs in February from the previous month, the Labor Department said.
The construction industry added 29,000 net new jobs, while factory payrolls increased by 8,000. Restaurants and bars added 59,000 net new jobs, and firms offering professional and business services increased their payrolls by 51,000.
Healthcare providers added 24,000 net new jobs.
Some economists were concerned that severe winter weather last month might have slowed the labor market recovery. A major snowstorm hit the Northeast in mid-February, the same week that the Labor Department surveys households and employers for the jobs report.
Initial jobless claims rose last week to 320,000 — the highest level since May — and payroll firm Automatic Data Processing reported this week that private-sector job growth slowed to 212,000 in February from 250,000 the previous month.
Despite the winter weather, nearly 70% of respondents in a survey by the nonpartisan Pew Research Center said they believed the job situation had begun recovering. Less than half thought that was the case in September 2013.
But slow wage growth remained a big concern. About 30% of poll respondents said their personal finances had yet to recover from the Great Recession.
This article was written by Jim Puzzanghera from The Los Angeles Times and was legally licensed through the NewsCred publisher network.