Jobs growth surged last month as automakers, builders and retailers pushed the unemployment rate to a five-year low, defying concerns that budget battles in Washington would harm the economic expansion, Bloomberg reported.
Payrolls increased more than forecast in February and the unemployment rate unexpectedly fell to 7.7 percent, a sign that U.S. employers were undaunted by the federal budget impasse. The jobless rate, derived from a separate survey of households than that used to estimate jobs growth, was forecast to hold at 7.9 percent, according to the Bloomberg survey median.
"It really should cause people to rethink their weak first-half growth estimates," said Drew Matus, deputy U.S. chief economist at UBS Securities LLC in Stamford, Conn., who correctly forecast the unemployment rate. "People counted out the U.S. consumer a little too easily on the payroll-tax increases."
Employment rose 236,000 last month after a revised 119,000 gain in January that was smaller than first estimated, according to Labor Department figures released today.
Ball State University economist Michael Hicks said, "Any enthusiasm over February's employment summary would show just how low our expectations have become in this recovery."
In a press release, Hicks said he believes the unemployment rate will keep falling as long as workers continue to leave the formal workforce.
"February's numbers are clear - for every two workers who find a job, more than one quits looking," he said. "Incomes rose tepidly, as should be expected with the slight increase in the average hours worked."