US job creation picks up in February

US job creation picked up pace in February after harsh weather depressed the numbers for two months, somewhat alleviating worries that economic growth had sputtered out during the winter. The economy generated 175,000 jobs last month, better than most analysts had expected given the persistence of severe storms, the Labor Department said Friday. The figure, which came after a series of poor indicators that had led economists to cut their forecasts, was still below the 200,000-plus level that would erase doubts about the economy's strength. But, coupled with an upward revision to the December and January figures that added another 25,000 jobs to the picture, the February achievement allowed many to believe that the main problem has been the extraordinarily cold and icy storms that have pummeled the eastern half of the US for months. "The extreme cold and snowy weather had a modest dampening effect on employment in February," said Sal Guatieri, senior economist at BMO Capital Markets. "But growth still picked up more than expected, suggesting the labor market could soon return to the solid pace established before the polar vortex dug in." "There was a clear weather effect: 601,000 people said that weather prevented them from working –- 284,000 more than the average February," said IHS Global Insight in a summary. Markets took the data in their stride. The dollar was flat against the euro and barely higher against the yen and pound, and stocks were also little-changed, the S&P 500 adding just 0.05 percent. The unemployment level, based on a household survey, a separate set of numbers from the establishment survey on job creation, rose back to where it was in December, at 6.7 percent, after falling to 6.6 percent. In all, 10.5 million people remained unemployed across the country in February, slightly higher than January but down from 12.1 million a year ago. The establishment survey showed the private sector employed a net 162,000 more people last month, while government at all levels boosted payrolls by 13,000. Job gains were strongest in professional and business services, and in education and health, while gains in manufacturing and construction were small. The establishment data suggested some of the impact of the harsh winter storms that have battered the country east of the Rocky Mountains. Average weekly hours worked fell to 34.2, compared with 34.5 a year ago. But average weekly earnings rose to a 2.2 percent gain year-over-year, a positive sign after having lagged other gains in the economy since the 2007-2009 recession. - Concerns remain - There were still significant weaknesses. The number of people working part-time because of slack business conditions fell, but those reporting that they could only find part-time work rose. The number of people unemployed for more than 27 weeks also surged, by 203,000. And the labor force participation rate remained at a very low 63.0 percent. "Given the weather-related noise, the only real message is that the economy does not appear to be accelerating significantly... but no downward pressure either," said Douglas Holtz-Eakin, president of the conservative American Action Forum and a former White House chief economist. Most economists said the jobs figures were strong enough that the central bank did not need to make any changes to its current policies. Judging the economy is increasingly expanding on its own strength, the Federal Reserve began reducing its stimulus program in January, cutting it each month by $10 billion to the current $65 billion a month. The Federal Open Market Committee meets again on March 18-19 to decide whether to slow the stimulus taper, and the issue of whether the recent economic weakness was weather-related or more fundamental has weighed over that decision. "Since the February report was solid, we now expect more tapering at the FOMC meeting," said Jason Schenker of Prestige Economics.