The American economy added 236,000 jobs in February, far more than expected and the unemployment rate fell to 7.7% from 7.9%, the lowest since December 2008.
A wide spectrum of industries hired new workers, including auto makers, builders and retailers. Economists had estimated that 165,000 new positions would be filled.
Equities, the dollar and Treasury yields all gained on signs the world’s largest economy may be rebounding from four years of weak economic growth and lackluster job creation. In mid-afternoon trading the Dow was 53 points higher, the dollar had climbed 1.1% against the euro and 1.0% versus the yen and the yield on the 10-yerar Treasury went back over 2.0% at 2.06% for the first time in over three weeks.
The strong employment picture is not likely to dissuade the Federal Reserve from its $85 billion a month liquidity support for the economy. Fed Chairman Ben Bernanke spent last week reassuring markets through his Congressional testimony that the central bank is not going to halt quantitative easing, counteracting an impression from the FOMC minutes that the board was moving to limiting the duration of its security purchases. The Fed has said that the bank will keep the Fed Funds rate at its current record low of 0.0%-0.25% until the unemployment rate reached 6.5%.
The report however, was not all good news. The labor force participation rate, which tracks the share of eligible people actually working, fell to 63.5% in February from 63.6% the month before equaling the lowest score since September 1981.
Chief Market Strategist