MercoPress. South Atlantic News Agency

US economy keeps creating jobs, while unemployment drops to 5.5%

In February, average hourly earnings for all employees on private non-farm payrolls rose by 3 cents to $24.78, with earnings up by 2% over the year.

US economy added 295,000 jobs in February, while the unemployment rate fell to 5.5% from 5.7%, according to Labor Department figures. It was the 12th month running that the economy added more than 200,000 jobs, the longest such run since 1994.

 The stronger-than-expected jobs figure led to a jump in the value of the dollar. Markets are now speculating that the Federal Reserve could raise interest rates in June this year.

The Labor Department figure showed there were job gains in a number of sectors including construction, health care, and transportation. There were also job gains in food and drinks outlets, professional and business services, and warehousing. However, employment in mining was down over the month.

The figure for the number of jobs created in January was revised down from 257,000 to 239,000. In February, average hourly earnings for all employees on private non-farm payrolls rose by 3 cents to $24.78, with earnings up by 2% over the year.

The labor force participation rate fell to 62.8% from 62.9%, as more people made themselves available for work.

The strong jobs data is likely to raise expectations that the Federal Reserve will be looking at raising interest rates sooner rather than later.

After the jobs report was released investors sold US Treasuries, a sign that many anticipate a rate rise.

Tom Porcelli, chief US economist at RBS Capital Markets in New York, said: “It's been looking extremely constructive over the past few months, at the very least it probably gives some people pause for cutting down their GDP expectations this year.

”We had already generated a million jobs in the previous three months; the economy is generating more job growth than we think it has the ability to do. While the summers have been very robust, at some point we'll have to see the slowdown to some extent.”