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US Job Growth Outpaces Expectations as Unemployment Rises

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US Job Growth Outpaces Expectations as Unemployment Rises

US employers added more workers than forecast last month, a sign the world’s largest economy was recovering from a weather-induced slowdown that saw job creation in December and January fall to the lowest level in three years.

Employers added 175,000 payrolls last month, after a revised 129,000 increase in January, the Labor Department reported today in Washington. A panel of economists surveyed by Reuters forecast an increase of 149,000 in February. The ADP Institute on Wednesday said employers added 139,000 workers in February.

The unemployment rate unexpectedly rose from 6.6 percent to 6.7 percent, as more workers entered the labour force.

The February estimate, while stronger than forecast, is still below 2013 levels, which saw employers add an average of 189,000 workers per month. The subdued pace of hiring has been partly attributed to severe weather, which didn’t let up in February. Official data showed severe weather kept 601,000 Americans away from work during the survey week, the most since 2010.

In February, average hourly earnings for private payroll employees rose by 9 cents to $24.31, the agency said. This represents a gain of 0.4 percent. Compared to 12 months ago, average hourly earnings rose 52 cents, or 2.2 percent. Economists forecast a monthly gain of 0.2 percent and an annualized increase of 2 percent.

Once the lynchpin of the Federal Reserve’s monetary policy, the jobless rate was de-emphasized by policymakers in recent months. Fed Chairman Janet Yellen reiterated the central bank’s 6.5 percent unemployment threshold last month before the Senate Banking Committee, but also questioned whether it was a reliable gauge of overall labour market conditions. The Fed used improvements in the labour market to justify bond tapering in each of its past two meetings. The Federal Open Market Committee is scheduled to meet again March 18-9.

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