US non-farm payroll: Economy adds 295,000 jobs in February

 
Jessica Morris
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US jobs growth beat expectations for February (Source: Getty)

The US economy was inoculated from last month's bout of bad weather as jobs growth smashed expectations.

Figures released by the Labour Department today showed that the US economy added 295,000 jobs in February, which was up from the 257,000 in January. This was above economists' forecasts of 240,000.

This bumper figure pushed the dollar up 1.2 per cent against the euro, taking it to 1.08 per dollar, its weakest level since 2004.

Job were added in food services and drinking places, professional and business services, construction, health care, and in transportation and warehousing. However, employment in mining was down over the month.

The unemployment rate slipped to 5.5 per cent last month, from 5.7 per cent reported in January, also matching a more than six-year low.

Investors have been eyeing wage growth for an indication of when the Federal Reserve will hike interest rates.

But wage growth missed estimates in February, with average hourly earnings rising 0.1 per cent month-on-month, and two per cent annually. January's figure had shown a 0.5 per cent increase in wages, the biggest since 2008.

"On the one hand, the Fed is getting close to meeting the full-employment side of its dual mandate, but on the other, they are nowhere near meeting their inflation target and it’s hard to see how they will in the near future without better wage growth," Luke Bartholomew, investment manager at Aberdeen Asset Management, said.

"The hope is that more jobs and lower unemployment will finally translate into better wage growth but there is disappointingly little sign of that so far."

January's jobs number was also revised down slightly, to 239,000, and lower than the 257,000 initially reported.

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