US adds more jobs than expected, unemployment rate falls

A burst of hiring in February added more jobs than expected and reduced the U.S. unemployment rate to a four-year low, the government said in a report Friday that showed employers are confident about the economy despite higher taxes and government spending cuts. The Labor Department said non-farm payrolls jumped 236,000 last month, easily beating economist expectations for a gain of 160,000. The unemployment rate fell to 7.7 percent from 7.9 percent in January, reflecting both gains in employment as well as people leaving the labor force. Job growth has averaged more than 200,000 a month since November, wages rose in February, and the month’s job gains were broad-based, led by the most construction hiring in six years. Still, the pace of gains is below the 250,000 jobs per month over a sustained period that economists say is needed to significantly reduce the unemployment rate, which had been stuck at 7.8 percent or above since September. Strong auto sales and a steady housing recovery are creating more hiring, which could spark more consumer spending and stronger economic growth. The construction industry added 48,000 jobs in February and has added 151,000 since September. Manufacturing gained 14,000 jobs last month and 39,000 since November. The jobs report was another sign of the economy’s fundamental health, which already has propelled the Dow Jones industrial average to record highs. The strong gains in February also offered hope the economy would be able to absorb new fiscal austerity. A 2 percent payroll tax cut expired in January, and $85 billion in federal budget cuts that could erase as much as 0.6 percentage point from growth this year began on March 1.