MercoPress. South Atlantic News Agency

US unemployment surprise: falls to 8.9%, the lowest in nearly two years

Construction jobs experienced their first gain in six months

The U.S. economy added 192,000 jobs in February while the unemployment rate fell to 8.9%, the lowest in nearly two years, the Labour Department said Friday. Last month’s jobs gain was the best since May.

Wall Street expected non-farm payrolls to show a gain of 185,000 with joblessness edging up to 9.1%.

Stock futures fluctuated in a narrow range after the in-line jobs report. Indications point to a mixed open Friday after Thursday’s big gains.

With soaring oil prices and looming tightening in fiscal and monetary policy providing head winds to the recovery, economists and investors have been hoping that job growth would step up and show that the private sector can keep growing on its own.

Private payrolls rose by 222,000 vs. forecasts for 198,000. Factory jobs rose by 33,000 after a big gain of 53,000 in January. Construction jobs also rose by 33,000 — their first gain six months. The service sector, which accounts for bulk of economic activity and hiring, added 122,000.

The jobless rate, derived from the separate household survey, fell for a third straight month, down 0.1 point to 8.9%. That’s the lowest since April 2009.

Unlike December-January declines in the unemployment rate, the labour force increased last month, suggesting a “real” improvement in joblessness. However, the labour force participation rate held at a long-term low of 64.2%.

February’s report may have reflected a bounce back from a sluggish January, when brutal storms in much of the country prevented many people from going to work. But January payrolls were revised up from a gain of 36,000 to 63,000.

US job growth has been sluggish during the recovery, only recouping about 1.2 million of the 8.66 million jobs lost during the recession. The sharpest jobs slump since the Depression will almost certainly end up being the longest as well.

Other labour reports this week have been largely positive, as the economic recovery gradually gains momentum. New jobless claims fell further below 400,000 last week to their lowest level since 2008, Labour said Thursday.