The U.S. economy added 311,000 jobs in February, above expectations, but well below January's downwardly revised figure of 504,000.
The unemployment rate clocked in at 3.6% in January, above the 3.4% figure in the prior month, the U.S. Bureau of Labor Statistics reported on Friday.
Economists had expected an increase of 207,500 jobs in February and the jobless rate to hold steady at 3.4%, according to a survey by FactSet Research Systems, a financial data firm.
Job gains in February were notable in the leisure and hospitality, retail trade, government, and health care sectors, the bureau said in the report, while employment declined in information and in transportation and warehousing sectors.
The Federal Reserve will likely closely examine the February jobs report as they prepare to release their next monetary policy decision on March 22.
As of Friday morning, according to CME Group's FedWatch tool, market participants' pricing of fed fund futures indicated there is a 60.2% probability that the central bank will increase rates by 50 basis points at the next meeting, and a 39.8% probability it will hike rates by 25 basis points.
The Fed's key short-term interest rate is now in a range of between 4.5% to 4.75%, after the central bank raised rates by 25 basis points on Feb. 1.
On March 7, in remarks before the U.S. Senate Committee on Banking, Housing, and Urban Affairs, Fed Chairman Jerome Powell suggested more rate hikes were forthcoming. "We continue to anticipate that ongoing increases in the target range for the federal funds rate will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2% over time," he said at the time.
John Luke Tyner, Fairhope, Ala.-based portfolio manager and fixed-income analyst at Aptus Capital Advisors, said by email that the report provided "another strong number from a headcount perspective, but a continuation of easing in wage growth."
Non-farm payrolls were above consensus, he noted, while the unemployment rate rose for "good" reasons as the labor participation rate rose.
But Mr. Tyner added that the data won't necessarily push the Fed to resume a 50-basis-point hike at their next meeting "although there are a few more data points that could change things next week."
