The United States job rate has hit a four year-low. The data was recently released by the Labor Department showing the health of the economy may be taking traction. The jobless rate fell to 7.7 percent, the lowest since December 2008, from 7.9 percent in January. The decline reflected both gains in employment and people leaving the labor force.
The upbeat report, which showed broad-based job gains, was another sign of the economy’s fundamental health, and it added fuel to a rally in U.S. stock markets that had already propelled the Dow Jones industrial average to record highs.
The dollar continues to strengthen. Economists had expected a gain of just 160,000 jobs. Nonetheless, the data was not so strong as to deter the Federal Reserve in its efforts to foster even faster economic growth by buying bonds, a policy known as quantitative easing. These economic signs indicate a robust recovery but there are economists that are still skeptical and recommend caution.
Although December and January’s employment data was revised to show 15,000 fewer jobs added than previously reported, details of the report were solid, with construction adding the most jobs since March 2007 and increased hours for all workers. Recovery efforts on the east coast have contributed to new jobs in construction. Job gains in February were well above the 195,000 monthly averages for the three months through January.
Hiring has increased but the pace of gains is still below the mark. Economists say 250,000 jobs per month are needed to sustain the current recovery. Fiscal tightening may be modifying these numbers in the coming months. The central bank is buying $85 billion in bonds per month and has said it would keep up asset purchases until it sees a substantial improvement in the labor market outlook.
Manufacturers stepped up hiring in February, although the pace was still well below early last year because of lackluster domestic demand and cooling growth overseas. Factory jobs increased 14,000 last month after rising 12,000 in January. Retail employment increased 23,700 jobs, rising for an eighth straight month, and defying a recent slowdown in sales. Healthcare jobs and social assistance continue to show solid gains.
The sustained steady job gains are lending some stability to wages. Average hourly earnings rose four cents last month. That was the fourth straight month of gains in hourly earnings.
Source: Mutikani, Lucia. “Sturdy Job Gains Offer Bright Sign for Economy.” Reuters. Thomson Reuters, 08 Mar. 2013. Web. 08 Mar. 2013.