US Economy Adds 313000 Jobs in February, Unemployment Rate Remains Steady

US Economy Adds 313000 Jobs in February, Unemployment Rate Remains Steady

FBN's Adam Shapiro discusses the Department of Labor's February jobs report, which revealed 313,000 jobs were added to the economy last month.

Diane Swonk, chief economist at Grant Thornton, said that, after 89 months of uninterrupted job growth, the result appeared to be one of the best of the current recovery.

The unemployment rate was unchanged and remain low at 4.1 percent in February.

In January, when the year-over-year rate of growth in average hourly earnings rose to 2.9 percent, it even sparked a mini-panic in the stock market, contributing to a broad reassessment of inflation risks in the economy. Average hourly earnings increased 2.6 percent from a year earlier following a downwardly revised 2.8 percent gain. The measure includes part-time workers who'd prefer a full-time position and people who want a job but aren't actively looking.

Paul Ashworth, chief USA economist at Capital Economists said that he is not paying much attention to wage data.

More modest wage growth cools fears about inflation and rising USA interest rates, both of which spooked the markets last month. If job growth is sustained it will put downward pressure on the unemployment rate as about 100,000 jobs per month are needed to keep up with growth in the working-age population.

The public sector gained 26,000, with hiring added in education and at the state government level. That runs counter to economists' expectation for hiring to broadly ease as the labor market tightens. The February bounty suggests there are still enough underemployed folks out there to ensure that companies, industries, and indeed the entire economy can continue expanding. The number of eligible people who were part of the labor force had been slipping, partly due to baby boomers heading to retirement.

But judging from recent comments, at least, it seems unlikely that the Fed will pay heed to those arguments.

More: Is the bull market for stocks moving into a more risky phase?

The economy has expanded for 104 straight months, or almost nine years, the third-largest expansion on record, and hiring often declines as recessions fade further into the past.

January's initial estimated wage gain - showing the biggest increase since the recession ended - had stoked concerns in financial markets that bigger than expected paychecks would lead to higher inflation and cause the Fed to shift its plan toward more aggressive rate increases.

Gene Peters, chief executive of Rosnet, a restaurant software company, has had to offer higher pay to attract new workers.

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