US employers added more jobs than forecast in February and the unemployment rate fell, suggesting the labour market is clawing its way forward again following several disappointing months.
Payrolls rose 379,000 after an upwardly revised 166,000 January increase, a Labour Department report yesterday showed.
Economists in a Bloomberg survey had projected a 200,000 February gain. The unemployment rate dropped to 6.2 per cent.
A decline in Covid-19 cases in recent weeks, along with an easing of business restrictions in some states, is starting to result in more job growth even as millions of Americans remain unemployed.
Last month's job growth was propelled by a 355,000 surge in leisure and hospitality employment.
Yields on 10-year Treasuries jumped after the report to the highest in more than a year, while US stock futures fell, erasing earlier gains.
Many economists expect to see an improvement in job prospects in the coming months as vaccinations pick up and Covid-19 concerns ease further.
Policymakers are closely monitoring the labour market as they consider another economic stimulus Bill.
President Joe Biden's US$1.9 trillion (S$2.6 trillion) relief package - which includes an extension of federal unemployment benefits - passed the House of Representatives last Saturday and the Senate's final vote is expected as soon as this weekend.
Federal Reserve chairman Jerome Powell said in a webinar on Thursday that the labour market is still a long way from maximum employment but that "there's good reason to expect job creation to pick up in the coming months".
"We want to see that the gains in employment are broad-based," Mr Powell said.
"We have a high standard for defining what maximum employment is and we think it will take some time to get there."
There were nearly 10 million unemployed Americans last month, almost double the pre-pandemic level, underscoring a lengthy road to recovery for the labour market.
Other areas of the economy, including housing and manufacturing, have recovered much more quickly.
Private payrolls rose by 465,000 last month. These included job gains in food services, retail, healthcare and manufacturing, after rising 90,000 in January. The 286,000 increase in employment at restaurants was the largest since July.
Government jobs, meanwhile, declined by 86,000 in February, largely reflecting cutbacks in state and local education.
The job report also showed that the number of Americans without work for 27 weeks or longer, known as long-term unemployed, rose to 4.15 million, the highest since August 2013.
BLOOMBERG
