A bumper new US employment report has shown the troubled jobs market gained momentum last month, raising hopes that a final piece of the recovery puzzle is falling into place.
The US Labor Department said on Friday the unemployment rate dipped to 8.9 percent last month from 9 percent the month before, while the economy created a solid 192,000 jobs.
If that trend continues in the next few months, “the employment situation in the United States would be well on its way to -recovery,” -Jason Schenker of Prestige Economics said.
It was the first time the unemployment rate has fallen below 9 percent in nearly two years.
The new numbers were much better than the 63,000 jobs created in January, and capped three months that have seen the unemployment rate fall by almost 1 percentage point.
Amid fears over rising oil prices, the strong report raised optimism that higher prices can be absorbed without doing too much damage to vital consumer spending and without denting company profits.
According to the American Automobile Association, gasoline pump prices have increased by about US$0.18 a gallon (3.8 liters) to an average US$3.47 in the last week alone, with the price of a gallon of regular unleaded gasoline leaping US$0.044 overnight.
The report also increased confidence that government layoffs can be offset by a resurgence in -private-sector hiring.
As federal and state authorities cut costs in the face of mounting debt, some 30,000 government workers were laid off last month.
However, those losses were more than offset by private companies creating 222,000 jobs, much to the relief of the White House and the millions of Americans who are struggling to get back on their feet.
“The labor market may not be great just yet, but it is firming and that is good news for job seekers,” Joel Naroff of Naroff Economic Advisors said.
House of Representatives Republican leader Eric Cantor said Friday’s report was an “encouraging sign that businesses are beginning to hire and people are getting back to work.”
Still, after watching some 8.75 million jobs disappear during the recession, millions are still out of work and many experts fear the economy remains vulnerable.
“Tempering the positive tone of today’s report was unexpected weakness in hours and average hourly earnings, which suggests a bit less growth of consumer spending in the first half than we previously expected,” analysts at Macroeconomic Advisers said.
Outplacement firm Challenger, Gray & Christmas said the number of job cuts announced by US-based firms increased for the second consecutive month last month.
“It is too soon to say whether the increases in January and now February represent a trend,” chief executive John Challenger said.
“Certainly the specter of rising gas prices could impact employers’ staffing decisions over the next six months,” he added.
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