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US jobs gains point to recovery

Friday, March 08 15:00:17

U.S. employers stepped up hiring in February, adding a greater-than-expected 236,000 workers to their payrolls and helping to push the jobless rate to a four year-low in a bright signal on the economy's health.

The data from the Labor Department on Friday showed the economy gaining traction despite the blow from higher taxes and deep government spending cuts.

"This was a strong number and one of those rare cases where we were firing on all cylinders," said Jacob Oubina, a senior U.S. economist at RBC Capital Markets in New York.

The jobless rate fell to 7.7 percent, the lowest since December 2008, from 7.9 percent in January. The decline reflected both gains in employment and people leaving the labor force.

The upbeat report, which showed broad-based job gains, was another sign of the economy's fundamental health, and it added fuel to a rally in U.S. stock markets that had already propelled the Dow Jones industrial average to record highs.

At the same time, the dollar strengthened and the yield on the benchmark 10-year U.S. Treasury note rose sharply.

Economists had expected a gain of just 160,000 jobs. Nonetheless, the data was not so strong as to deter the Federal Reserve in its efforts to foster even faster economic growth by buying bonds, a policy known as quantitative easing.

"We're in a sweet spot of sorts with the data showing a more robust recovery, which supports stocks and the dollar, yet not quite strong enough to declare an end to quantitative easing," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.

Although December and January's employment data was revised to show 15,000 fewer jobs added than previously reported, details of the report were solid, with construction adding the most jobs since March 2007 and increased hours for all workers.