Reinforcing expectations of an interest rate hike by the Federal Reserve next week, the Labor Department released a report on Friday showing stronger than expected job growth in the month of February.
The Labor Department said non-farm payroll employment jumped by 235,000 jobs in February after surging up by a revised 238,000 jobs in January.
Economists had expected employment to climb by about 195,000 jobs compared to the addition of 227,000 jobs originally reported for the previous month.
The stronger than expected job growth was partly due to a jump in employment in goods producing sector, which added 95,000 jobs.
The construction industry led the way higher with an increase of 58,000 jobs, while the manufacturing and mining sectors added 28,000 jobs and 9,000 jobs, respectively.
The Labor Department also pointed to an increase in employment in private educational services, which rose by 29,000 jobs.
With the stronger than expected job growth, the unemployment rate edged down to 4.7 percent in February from 4.8 percent in January, matching expectations.
The drop in unemployment rate came as the household survey of employment showed an increase of 447,000 people, while the labor force increased by 340,000 people.
The report also said the annual rate of growth in average hourly employee earnings accelerated to 2.8 percent in February from 2.6 percent in January.
"In an environment where productivity is still barely rising at all, the Fed can't allow wage growth to accelerate much above 3%," said Paul Ashworth, Chief U.S. Economist at Capital Economics.
The Federal Reserve is scheduled to hold a two-day monetary policy meeting on March 14th and 15th and is widely expected to raise interest rates by a quarter point.
by RTT Staff Writer
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