US economy adds 295,000 jobs in February

Construction workers in Virginia US Image copyright AFP
Image caption Construction was one of the sectors which added jobs

The US economy added 295,000 jobs in February, while the unemployment rate fell to 5.5% from 5.7%, according to Labor Department figures.

It was the 12th month running that the economy added more than 200,000 jobs, the longest such run since 1994.

The stronger-than-expected jobs figure led to a jump in the value of the dollar.

Markets are now speculating that the Federal Reserve could raise interest rates in June this year.

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The Labor Department figure showed there were job gains in a number of sectors including construction, health care, and transportation.

There were also job gains in food and drinks outlets, professional and business services, and warehousing. However, employment in mining was down over the month.

The figure for the number of jobs created in January was revised down from 257,000 to 239,000.

In February, average hourly earnings for all employees on private non-farm payrolls rose by 3 cents to $24.78, with earnings up by 2% over the year.

The labour force participation rate fell to 62.8% from 62.9%, as more people made themselves available for work.

Image copyright Getty Images

Analysis: Andrew Walker, BBC economics correspondent

So the American labour market is off to the races, leaving behind the legacy of the financial crisis? Or is it?

There is certainly some good news in these figures, such as the 12th consecutive month in which employers have added at least 200,000 jobs. It's also worth noting just how much some of the bad numbers have come down since the worst of the great recession. Unemployment peaked at 10% and is now 5.5%.

A wider measure which includes a number of other groups who are working less than they want to is down from 17% to 11%. But before the crisis it was as low as 8%. Another important comparison is the percentage of the adult population who do have jobs. That is still significantly lower than it was throughout the 20 years before 2008.

So the situation is improving but it is still work in progress.

'Extremely constructive'

The strong jobs data is likely to raise expectations that the Federal Reserve will be looking at raising interest rates sooner rather than later.

After the jobs report was released investors sold US Treasuries, a sign that many anticipate a rate rise.

Bruce McCain, chief investment strategist at Key Private Bank in Cleveland, Ohio, said: "Any sign of undue strength will raise the spectre of rates climbing sooner than expected, and we were already expecting rates to rise this year."

Meanwhile Tom Porcelli, chief US economist at RBS Capital Markets in New York, said: "It's been looking extremely constructive over the past few months, at the very least it probably gives some people pause for cutting down their GDP expectations this year.

"We had already generated a million jobs in the previous three months, the economy is generating more job growth than we think it has the ability to do. While the summers have been very robust, at some point we'll have to see the slowdown to some extent."

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