The US unemployment rate rose to 6.7% in February, even as the economy added more jobs than economists had expected.
According to the Labor Department’s latest non-farm payrolls survey, 175,000 new jobs were created in February. The figure was better than expected and comes after two disappointing months of job growth.
Revisions by the agency also showed the economy added slightly more jobs in recent months than previously believed. Employers added 129,000 jobs in January, up from 113,000, and 84,000 jobs in December, up from 75,000. Those numbers were still well below the 205,000 per month that the US added in the year to November 2013.
The unemployment rate rose to 6.7% in February from 6.6% in January as the level of employment – the actual number of people working – barely changed in the month while the number of people out of work rose.
Once again the report highlighted the deeply uneven nature of the recovery in the jobs market. The unemployment rate for white people was 5.8%, for African Americans it was 12%, and Hispanics 8.1%. Unemployment for teenagers was 21.4%. The number of long-term unemployed (those jobless for 27 weeks or more) increased by 203,000 in February to 3.8m and these people accounted for 37% of the unemployed. All those rates were little changed from the previous month.
The participation rate – which measures the percentage of people in the workforce - held steady at 63% in February, hovering at a low unseen since the 1970s.
The jobs figures come after the Federal Reserve released its latest beige book report on the state of the economy and said extreme winter weather was taking a toll on the US economy.
Paul Ashworth, chief US economist at Capital Economics, said the latest figures were better than expected given the unusually harsh winter.
“The 175,000 rise in payrolls in February, which followed an average rise of 115,000 in the previous two months, is all the more impressive since activity was clearly hampered by the unusually severe weather,” he said.
Jason Furman, chairman of the White House’s council of economic advisers, said: “February 2014 was the 48th straight month of private-sector job growth, with businesses adding 8.7m jobs over that time. Despite a major snowstorm that hit the East Coast during the reference week for the labour market surveys, the rate of job growth picked up from the December and January pace. Nevertheless, the unemployment rate remains elevated, and for too many Americans, wages have been slow to rise.”
The US economic recovery has slowed in recent months with many blaming the weather. Parts of the US are experiencing their worst winter in 30 years.
Fed chair Janet Yellen told Congress last month that she was keeping a close eye on the economic data as the central bank scales back its bond-buying economic stimulus programme, known as quantitative easing (QE). QE now stands at $65bn per month and Yellen has signalled the Fed plans to cut another $10bn at its meeting on March 18-19 unless the economy stalls.
The latest non-farm jobs report seems unlikely to deter the Fed from its course. The construction sector, sensitive to cold weather, added 15,000 jobs in February after adding 50,000 in January. Manufacturing firms added 6,000 jobs last month, retailers cut 4,100 jobs as a 12,000 gain in food and beverage stores was offset by a 12,000 decline in electronics and appliance stores. The leisure and hospitality sector added 25,000 jobs and professional and business services employers added 79,000.
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