Employers in the U.S. boosted payrolls more than forecast in February, indicating companies are growing more optimistic about the expansion. The jobless rate held at 8.3 percent.
The 227,000 increase in payrolls followed a revised 284,000 gain in January that was bigger than first estimated, Labor Department figures showed today in Washington. Job growth over the last six months was the strongest since 2006. The median projection of economists in a Bloomberg News survey called for a 210,000 rise in February employment.
More jobs are helping fuel the wage gains that drive consumer spending, which accounts for about 70 percent of the economy. The latest pickup in employment may not be convincing enough for Federal Reserve Chairman Ben S. Bernanke, who last week said the labor market remains “far from normal,” a sign policy makers continue to see merit in keeping interest rates low for several years.
“Businesses have a bit more confidence about where the recovery is going,” Omair Sharif, a U.S. economist at RBS Securities Inc. in Stamford, Connecticut, said before the report. There’s “a little better feeling that demand for their products will hold up for the next six months or so,” he said.
Payroll estimates from 94 economists in the Bloomberg survey ranged from increases of 125,000 to 275,000 after an initially estimated 243,000 gain the prior month. Revisions added a total of 61,000 jobs to payrolls in December and January.
Some 1.2 million jobs were created in the last six months, the most since the same period ended May 2006.
The unemployment rate, derived from a separate survey of households, was forecast to hold at 8.3 percent, according to the survey median. The jobless rate held steady as the survey showed the labor force grew. Employment climbed by 428,000 in February, while the labor force rose 476,000.
The participation rate, which indicates the share of working-age people in the labor force, rose to 63.9 percent from 63.7 percent.
Private payrolls, which exclude government agencies, rose 233,000 in February after a revised gain of 285,000 the prior month. They were projected to climb by 225,000. Manufacturing payrolls increased by 31,000 after a revised 52,000 gain.
“There is hiring going on,” Richard Fearon, chief financial officer at Eaton Corp. said at a March 6 industrial conference in New York. The Cleveland-based maker of circuit breakers and truck transmissions will “definitely need more manpower to serve” growing demand for tractor-trailers and for the equipment used in construction and hydraulics, he said.
Employment at service-providers increased 203,000. Retail trade payrolls fell 7,400 in February. Professional and business service payrolls increase 82,000 last month, including a 45,200 pickup in temporary hiring.
Education and health services employment jumped 71,000, the most since September 2006, according the Labor Department.
Construction companies reduced payrolls by 13,000 workers last month, the biggest drop since January 2011.
Government payrolls decreased by 6,000 in February, reflecting cutbacks at the federal and state levels.
Average hourly earnings rose 0.1 percent to $23.31, today’s report showed. The average work week for all workers held at 34.5 hours.
Even with the “positive developments” in the job market, Bernanke told lawmakers last week the “modest and uneven” expansion needs the support of monetary policy. The central bank said in January that economic conditions are likely to warrant low interest rates at least through late 2014.
The Commerce Department last week reported the economy grew at a 3 percent annual pace in the fourth quarter after a 1.8 percent gain in the prior three months.
“The unemployment rate remains elevated, long-term unemployment is still near record levels and the number of persons working part time for economic reasons is very high,” Bernanke said during a Feb. 29 testimony to Congress. Fed policy makers judge “that sustaining a highly accommodative stance for monetary policy is consistent with promoting both objectives” for stable prices and maximum employment, he said.
The so-called underemployment rate, which includes part-time workers who’d prefer a full-time position and people who want work but have given up looking, decreased to 14.9 percent from 15.1 percent.
The report also showed a decrease in long-term unemployed Americans. The number of people unemployed for 27 weeks or more fell as a percentage of all jobless, to 42.6 percent from 42.9 percent.