Economy adds 227,000 jobs, jobless rate unchanged

U.S. employers added 227,000 jobs in February to complete three of the best months of hiring since the recession ended. The unemployment rate was unchanged, largely because more people streamed into the work force.

The Labor Department said Friday that the unemployment rate stayed at 8.3 percent last month, the lowest in three years.

And hiring in January and December was better than first thought. The government revised those figures to show 61,000 additional jobs.

The economy has now generated an average of 245,000 jobs in the past three months. The only stretch better since the recession began was in early 2010.

That bodes well for President Barack Obama's re-election chances, although he's still likely to face the highest unemployment rate of any post-war president.

"Overall, another very strong payroll report and there's every chance that March will bring more of the same," said Paul Ashworth, chief U.S. economist with Capital Economics.

Stock futures rose slightly after the report was released. Dow Jones industrial average futures, which were up 10 points before the report, added 19 points when it came out. Standard & Poor's 500 futures were up one point before the report and tacked on two.

Another strong month of hiring makes it less likely that the Federal Reserve will take additional steps to boost the economy at its meeting next week.

Last month's hiring was broad-based and in both high-paying and lower-paying industries. Manufacturing, mining, and professional services, such as accounting, all added jobs.

Still, wages are rising only modestly. Average hourly pay increased by 3 cents, to $23.31. In the past year, it has gone up only 1.9 percent — trailing the rate of inflation.

Governments at all levels cut only 6,000 jobs in February and 1,000 in January, after a revision. That's a welcome change from the heavy layoffs by cash-strapped states and cities over the past two years. Last year alone they cut an average of 22,000 jobs per month.

Nearly a half-million people began looking for work last month, and most found jobs, the report said. That's a sign of growing optimism in the job market, as many people who had given up on looking for work came off the sidelines to search for jobs.

That also counters a troubling trend: a key reason why the unemployment rate has dropped since last year is that many out-of-work people have stopped looking for work. Only people without jobs who are actively seeking one are counted as unemployed.

A sustained rise in the number of people looking for jobs is a good sign, even if the unemployment rate doesn't change.

"The unemployment rate is holding steady even as the labor force grows. That is a good outcome," said Dan Greenhaus, an analyst with BTIG, a brokerage firm in New York.

The report was filled with other promising details.

The so-called "underemployment" rate — which includes those who've given up looking for work and those with part-time jobs who want full-time work — fell to 14.9 percent. That's the lowest in three years.

The number of people employed in February — 142.1 million — was the highest since January 2009. Manufacturing payrolls were at their highest point since April 2009.

And over the past three months, the number of employed people has risen by 1.45 million, the biggest three-month gain since March 2000.

Friday's report comes as a host of data points to an improving economy and job market. Weekly applications for unemployment benefits have fallen about 14 percent in six months. Though they ticked up last week, average applications remain near a four-year low.

And service companies, which employ most Americans, are expanding at a faster pace, according to a private survey released this week. A gauge of employment shows that service firms are still hiring, particularly in the mining, educational services, and transportation and warehousing industries.

The service sector includes everything from restaurants and hotels to health care firms and financial service companies.

Some companies must hire because they can't squeeze more output from their current staffs. Last year, worker productivity rose at its slowest pace in nearly 25 years. That means companies will likely have to add staff to meet growing demand.

Other figures point to the same conclusion. The average work week was unchanged at 34.5 hours. That's close to the pre-recession total and suggests that companies will have to hire more workers as business improves, rather than adding more hours.