US hiring gathers momentum

Non-farm payrolls rose by 236,000 in February, beating analyst forecasts of 160,000, as the US labour market picks up steam.

The unemployment rate fell from 7.9 per cent to 7.7 per cent, the lowest in more than four years.
The jump in the payrolls report follows a new low in unemployment insurance claims this week and suggests that the US labour market is gaining momentum. At issue now is whether the US labour market is strong enough to weather the headwind from across-the-board cuts to public spending known as sequestration. More News From Financial Times
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There was "no doubting the strong employment data in February", said Alan Ruskin of Deutsche Bank in New York. "The data certainly fits with the story of an economy that has weathered the early stages of the fiscal drag remarkably well."
The upbeat report lifted shares in the US and Europe and the dollar index edged close to a seven-month high. US government bond prices fell, pushing yields on 10-year Treasury bonds to their highest level in nearly a year.
The Dow Jones Industrial Average set another record high, briefly rising above 14,400 in early trading, and the S&P 500 was nearing a five-year peak set in October 2007.
"While more work remains to be done, today's employment report provides evidence that the recovery that began in mid-2009 is gaining traction," said Alan Krueger, chairman of President Barack Obama's council of economic advisers.
Republicans, however, were quick to emphasise that unemployment remains at historically high levels.
"Any job creation is positive news, but the fact is unemployment in America is still way above the levels the Obama White House projected when the trillion-dollar stimulus spending bill was enacted, and the federal government's ongoing spending binge has resulted in a debt that exceeds the size of our entire economy," said John Boehner, Speaker of the House.
One of the strongest signs in the jobs report was a surge in hours worked, up by 0.5 per cent on the previous month, which boosted average weekly payrolls by 0.6 per cent.
Employers often ask existing staff to work more hours before they start hiring and the boost to worker incomes will help to offset the drag from a rise in payroll taxes at the start of the year.
Construction was a big contributor to job growth, up 48,000, confirming the boost to the wider economy as the housing market gets back on its feet.
Business services added 73,000 jobs, healthcare hiring was up 39,100 and the leisure sector added 24,000 positions. The only drag on the numbers was government, which shed another 10,000 workers.
One sour note was figures for the previous two months, which were revised down by a total of 15,000.
The statistical margin of error on the jobs number is plus or minus 90,000, so strong or weak figures can be misleading, but the average for the last three months has now risen to 191,000, suggesting the pick-up in jobs growth is real.