March 7, 2013
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US unemployment rate falls to four-year low as economy adds 236,000 jobs
February was the 29th month in a row that the US economy had added jobs. Photograph: John Moore/Getty Images.The US added 236,000 new jobs in February as the unemployment rate edged down to 7.7%, its lowest level since December 2008. The figures easily beat economists’ predictions that the US would add 160,000 jobs in February and look set to drive US stock markets to new record highs.
This is 29th month in a row that the US has added jobs. On average, 183,000 jobs were added each month in all of 2012. In past three months, that pace has picked up to an average of about 195,000 a month.
The Bureau of Labor Statistics said the job gains were made in professional and business services, construction, and healthcare. In a sign of the improving housing market, the construction industry added 48,000 in February. Since September, construction employment has risen by 151,000.
There are still major issues in the job market, however. The number of long-term unemployed – those jobless for 27 weeks or more – was unchanged in February at 4.8m. These individuals accounted for 40.2% of the unemployed. The unemployment rates for teenagers (25.1%), black people (13.8%), and Hispanics (9.6%) remained high and showed little or no change.
The number of people not in the labour force rose to 90.1m in February, up from 89.9m in January and 88.3 million in February 2012.
The news comes after payroll giant ADP’s latest poll concluded that the private sector added 198,000 jobs in February, higher than the 175,000 forecast by economists. The firm also revised its January number up to 215,000, 22,000 higher than its initial estimate.
Mark Zandi, chief economist of Moody’s Analytics, which compiles the report with ADP, said: “The job market remains sturdy in the face of significant fiscal headwinds. Businesses are adding to payrolls more strongly at the start of 2013 with gains across all industries and business sizes. Tax increases and government spending cuts don’t appear to be affecting the job market.”
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The jobs figures and better than expected figures from the service sector helped drive US stock markets to all time highs this week. On Tuesday, the Dow Jones Industrial Average passed levels unseen since before the start of the recession.
Dow futures contracts, a shaky indication of the direction the stock market is likely to take, were rising before the New York Stock Exchange opened, suggesting the index could hit new highs Friday.
