U.S. employers added more than a quarter-million jobs in February — the most in four months — in a bright sign that the labor...
WASHINGTON — U.S. employers added more than a quarter-million jobs in February — the most in four months — in a bright sign that the labor market is on the mend. Wall Street rallied on the news, propelling the Dow Jones industrials to a 3 ½-year high.
At the same time, more job-seekers returned to the hunt, pushing the unemployment rate higher.
The latest picture of the country’s employment climate, released by the Labor Department yesterday, showed that the nation’s payrolls expanded by 262,000 last month. Gains were broad-based: Manufacturing, construction, retail, health care and business services were among the sectors seeing increases.
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“Businesses are growing increasingly confident in the economy, and we’re beginning to see more aggressive hiring,” said Stuart Hoffman, chief economist at PNC Financial Services Group. “Companies are starting to put their money where their mouth is.”
On Wall Street, the Dow Jones industrials surged 107.52 points to close at 10,940.55, the highest since June 12, 2001. The S&P 500 was up 11.65 at 1,222.12, the best closing since the index finished at 1,234.45 on July 3, 2001. The tech-focused Nasdaq composite index continued to lag behind the other major indexes but nonetheless gained 12.21 to 2,070.61, its best close since Feb. 16.
Microsoft, one of the 30 Dow stocks, ended unchanged at $25.17 a share. Boeing, also a Dow stock, advanced 96 cents to $58.38.
Investors worried about inflation and higher interest rates found comfort in the report.
“It hit the sweet spot,” said Jack Caffrey, equities strategist at J.P. Morgan Private Bank. “You got more people getting jobs, that’s the important thing, and you have growth in wages, but not enough to raise fears of inflation. And that’s really helping the market right now.”
Last month’s payroll gain was nearly double the 132,000 jobs added in January.
Yet, for those who want to find work, the journey to snag a job can be bumpy.
The overall civilian unemployment rate, which comes from a separate statistical survey from the payroll figures, rose to 5.4 percent last month from 5.2 percent in January. The increase partly reflected growth in the labor force as more people started job searches.
The jobless rate had been either 5.4 percent or 5.5 percent for the last six months of 2004.
Economists think the economy in the January-to-March quarter is growing at a rate of around 4 percent, which would be a sufficient pace for solid — but not spectacular — job creation.
Against that backdrop, economists think Federal Reserve policy-makers will stick with their measured approach to raising interest rates. The Fed has boosted rates six times, each by one-quarter point, since June 2004. Another increase of that size is expected March 22.
For workers and job-seekers, the employment climate can be somewhat trying.
Workers’ average weekly earnings held steady last month at $535.83. Analysts said they would keep a close eye on the direction of wages and how consumer spending, the economy’s lifeblood, fares in the coming months.
The report said there were 8 million people unemployed last month with the average duration of 19.1 weeks, down slightly from 19.3 weeks in January.
The nation’s manufacturers added 20,000 jobs last month after five straight months of losses. Employment gains in the manufacturing of motor vehicles and parts accounted for about half of the increase, the government said.
Construction companies added 30,000 jobs last month. Retailers also boosted payrolls by 30,000. Professional and businesses services increased employment by 81,000. Health-care jobs grew by 23,000. Temporary help firms added 30,000 slots.
“It seems as if almost every industry is getting into the act and starting to hire again,” said Joel Naroff, president of Naroff Economic Advisors.
Investors could see yesterday’s gains as the boost that many expected after months of uncertainty — and a fresh push toward 11,000 on the Dow could come in the next few days. The Dow last topped the psychologically important 11,000 level in intraday trading on June 13, 2001.
Economic recovery and strong corporate earnings helped the markets recover in 2003 and last year. Yesterday’s economic data points to continuing expansion and stability.
“We’ve seen confirmation that the economy is expanding, and that’s a very strong tail wind for us to move higher,” said Hans Olsen, managing director and chief investment officer at Bingham Legg Advisers. “We still have some head winds in oil prices and the dollar, but I think we can still run with this.”