US economy creates 313,000 jobs in Feb

The US economy added 313,000 jobs in February, the biggest number of jobs in more than 1-1/2 years, but a slowdown in wage growth pointed to only a gradual increase in inflation this year.

Data for December and January were revised to show the economy creating 54,000 more jobs than previously reported, according to the Labour Department.

The labour market is benefiting from strong domestic demand and robust US business sentiment following passage of the Trump administration’s $1.5 trillion tax cut package.

The tax cuts came into effect in January, reports Reuters.

The blowout payrolls number cemented expectations the Federal Reserve will increase interest rates at its March 20-21 policy meeting.

Sluggish wage growth, however, left economists divided on whether the US central bank would upgrade its rate forecast for this year to four hikes from three.

Average hourly earnings edged up four cents, or 0.1 per cent, to $26.75 in February, a slowdown from the 0.3 per cent rise in January.

The unemployment rate was unchanged at a 17-year low of 4.1 per cent in February for a fifth straight month as 806,000 people entered the labour force in a sign of confidence in the job market.

The average workweek rebounded to 34.5 hours after falling to 34.4 hours in January.

Economists polled by Reuters had forecast payrolls rising by 200,000 jobs last month and the unemployment rate falling to 4.0 per cent.

Average hourly earnings had been expected to increase 0.2 per cent in February.