US economy adds 175,000 jobs in February

US job fair

The US economy added 175,000 new jobs in February, but the unemployment rate rose slightly to 6.7%.

The jobs figures, from the US Labor Department, were better than many had been expecting and marked a rebound from two weak months.

It had been thought the figures would be affected by recent harsh weather, which had hit much of the country.

But the unemployment rate, based on different statistics, went up slightly from January's 6.6% to 6.7%.

'Underlying strength'

February's jobs figure, known as non-farm payrolls and based on a survey of employers, compares with the 129,000 new jobs created in January.

Analysts had been expecting a rise of about 150,000 last month.

"It is stronger than expected on several fronts," said Camilla Sutton, from Scotia Capital.

"That these numbers came even while weather was bad shows the underlying strength of the US economy."

US snow storms Snow storms have been blamed for recent weak US economic data

A large chunk of the gains came from financial and other services, which were responsible for an extra 79,000 jobs.

Construction companies, many of which had been affected by the bad weather, added 15,000 jobs.

But the information sector lost 16,000 jobs, most of them in film and sound recording.

Average hourly earnings in the private sector rose by 3.7%, or about nine cents, to $24.31, the figures show. Over the year, average hourly earnings have risen by 2.2%.

'Massive headwinds'

The unemployment rate is calculated from a different survey, of households, and rose slightly from its lowest level since October 2008. It leaves the total number of unemployed relatively unchanged at 10.5 million.

However, the same survey shows the number of long-term unemployed (defined as those jobless for 27 weeks or more) increased by 203,000 in February to 3.8 million.

Cold and snowy weather, which has disrupted much of the country, was one of the reasons 601,000 people with jobs stayed at home last month, according to the survey.

The US Federal Reserve has said the severe winter was to blame for recent weaknesses in jobs numbers, retail sales and housebuilding.

US Federal Reserve chair, Janet Yellen The US Federal Reserve is cutting its bond-buying programme by $10bn a month

Analysts see the latest figures as further evidence the apparent slowdown was only a blip.

"This bodes well for the economy since there were massive headwinds against it and there had been some data before this indicating that it wouldn't be so strong," said Adam Sarhan, chief executive of Sarhan Capital.

Tapering

The stronger-than-expected figures are likely to mean the Federal Reserve will continue to withdraw extra support from the economy - a process known as tapering.

The central bank had been spending $85bn a month buying bonds, but has now reduced that to $65bn and plans to cut the programme by $10bn each month.

"Fed tapering will likely continue full steam ahead," said Craig Dismuke, from Vining Sparks.

Separate figures released on Friday showed the US trade deficit widened slightly in January, partly because of rising oil imports.

The deficit grew to $39.1bn (£23.4bn), an increase of 0.3% on December's figure.

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