The U.S. economy added 295,000 non-farm payroll jobs in February while the unemployment rate dropped to 5.5 percent, according to a newly released employment report from the U.S. Department of Labor, higher than the estimate of 240,000 from economists at briefing.com.
The February’s job number of 295,000 was also higher compared with average monthly gain of 266,000 over the prior 12 months and should give the Federal Reserve some additional signs that the U.S. job market is on solid ground in terms of job growth.
Average hourly earnings for all employees on private nonfarm payrolls increased by 3 cents to $24.78. Over the year, average hourly earnings have risen by 2.0 percent which is lower than the 3 percent level the Federal Reserve said is needed to grow the U.S. economy.
The employment numbers for the last two months were revised lower by 18,000 lower than previously reported. The change in total nonfarm payroll employment for December remained the same at 329,000 but the change for January was revised from 257,000 to 239,000.
The average workweek for all employees on private nonfarm payrolls in February was 34.6 hours for the fifth month in a row.
For the month of February, the job gains were highest in in professional and business services which saw an increase of 51,000 last month and has risen by 660,000 over the year followed by retail jobs which saw an increase of 32,000 and construction which added 29,000 jobs.
The labor force participation rate was mostly unchanged at 62.8 percent and has been within a narrow range of 62.7 to 62.9 percent since April 2014.
Last month the January employment report showed an increase of 257,000 non-farm payroll jobs while the unemployment rate was 5.7 percent.
On Wednesday private payroll processor ADP reported lower than expected job gains for February with an increase of 212,000 private payroll jobs compared to the estimate of 230,000 from briefing.com. The majority of the job gains came in the service sector which saw a 12 percent monthly drop compared to January.
Job growth and inflation are the two most important economic data points that the U.S. Federal Reserve uses to gauge monetary policy and their stimulus programs.
On Monday the Bureau of Economic Analysis reported that for January the PCE price index year-over-year (YoY) rate is 0.22, down from 0.77 percent from the previous month.
The Core PCE index (minus Food and Energy) came in at 1.31 percent, slightly lower from the previous month’s reading of 1.34 percent YoY.