US employers defied a global slowdown and pumped up hiring in February, fending off worries about financial market turmoil and the oil industry crash.
The Labor Department reported Friday that companies and government authorities added a much better-than-expected 242,000 jobs last month, and the figures for the previous two months were revised higher.
Steady growth in consumer spending underpinned the strong jobs gains in the retail and health-care sectors, easily offsetting the slowdown in international trade and huge oil company layoffs.
The unemployment rate meanwhile held steady at 4.9 percent, the lowest since February 2008 at the beginning of the Great Recession.
The new data underscored the resilience in the US economy amid worries that it was beginning to stall early this year, though analysts still expect growth to ease in the coming months. But the details of the data raised a challenge to the Federal Reserve, which has been looking for more concrete signs of tightening in the labor market to justify plans to continue raising interest rates this year.
While overall hiring was unexpectedly strong, the February numbers suggested there remains some noteworthy slack in the jobs market: little change in the numbers of unemployed and underemployed and limited upward pressure on wages.
Two-thirds of the new jobs were in the relatively low-paid hospitality, retail and health-service sectors, while the better-paying manufacturing and mining sectors continued to bleed jobs.
Partly as a consequence, average wages, which had begun to pick up healthily over the past few months, fell in February, as did average hours worked.
Year-on-year wages were up a modest 2.2 percent, when they had been trending at around 2.5 percent in previous months.
The number of people forced to work part-time because of the lack of full-time positions hardly budged. And there was a rise in the number of long-term unemployed.
On the other hand, the data indicated that new hiring pulled back into the jobs market hundreds of thousands of people who, discouraged, had dropped out.
The labor force participation rate significantly rose 0.2 point to 62.9 percent, after having slumped as low as 62.4 percent last September. Analysts said the slowdown in wage growth is likely to prove a short-lived statistical blip and that the overall picture of the February numbers is strength.
"There are thus in our view no signs whatsoever that the US labor market has been losing any momentum," said economist Harm Bandholz of UniCredit.
- Slowdown expected -
The jobs report confirmed expectations by the Federal Reserve that the US economy continues to push ahead modestly, shrugging off China's slowdown and weak growth in Europe. Nevertheless, analysts said they believed the Fed will still hold off from raising interest rates in its mid-March policy meeting.
Many still expect the economy to slow in the coming months. "Current signs of rising inflationary pressures and a tightening labor market need to be viewed alongside indications that the pace of economic growth may be slowing, and possibly sharply," said Chris Williamson of Markit.
"The big question will be the extent to which the Fed heeds the warning lights flashing in the background."
In addition, added Chris Low of FTN Financial, "lots of poor-quality jobs might encourage the Fed to raise rates, but falling wages and hours should keep them at bay in March at least."