Payrolls increased more than forecast in February and the jobless rate unexpectedly fell to a five-year low of 7.7 percent, a sign U.S. employers were undaunted by the budget impasse in Washington.
Employment rose 236,000 last month after a revised 119,000 gain in January that was smaller than first estimated, Labor Department figures showed today in Washington. The median forecast of 90 economists surveyed by Bloomberg projected an advance of 165,000. The jobless rate dropped from 7.9 percent. Hiring in construction jumped by the most in almost six years.
Automakers and home-improvement retailers are among those announcing plans to take on more staff, which will lead to gains in incomes that may help the world’s biggest economy weather federal cutbacks and higher taxes. Today’s data may ratchet up debate among Federal Reserve policy makers, who are looking for “substantial” progress in the labor market to determine whether to maintain record stimulus.
“There’s a lot of dry tinder in the economy,” Robert Dye, chief economist at Comerica Inc. in Dallas, said before the report. “If companies are experiencing growth in orders, they’re going to be able to look past these broader fiscal concerns. We’re still going to need to see ongoing solid gains in employment and steady drops in unemployment before the Fed eases off the gas pedal.”
Stock-index futures maintained gains after the figures. The contract on the Standard & Poor’s 500 Index expiring in March rose 0.5 percent to 1,545 at 8:39 a.m. in New York. Treasuries declined, pushing up the yield on the benchmark 10-year note to 2.07 percent from 2 percent late yesterday.
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