U.S. employers added more jobs than forecast in February and the unemployment rate declined, suggesting the labor market is clawing its way forward again following several disappointing months.
Payrolls increased 379,000 after an upwardly revised 166,000 January increase, according to a Labor Department report Friday. Economists in a Bloomberg survey projected a 200,000 February gain. The unemployment rate dropped to 6.2%.
A decline in COVID-19 cases in recent weeks, along with an easing of business restrictions in some states, is starting to result in more job growth even as millions of Americans remain unemployed. February job growth was propelled by a 355,000 surge in leisure and hospitality employment.
Yields on 10-year Treasuries briefly rose to the highest in more than a year, while U.S. stock futures rebounded after slipping earlier after the report.
Many economists expect to see job prospects improve in the coming months as vaccinations pick up and virus concerns ease further.
Policymakers are closely monitoring the labor market as they consider a another economic stimulus bill. President Joe Biden’s $1.9 trillion relief package — which includes an extension of federal unemployment benefits — passed the House of Representatives on Feb. 27 and the Senate’s final vote is expected as soon as this weekend.
Federal Reserve Chairman Jerome Powell said Thursday in a webinar that the labor market is still a long way from maximum employment but that “there’s good reason to expect job creation to pick up in the coming months.”
“We want to see that the gains in employment are broad-based,” Mr. Powell said. “We have a high standard for defining what maximum employment is and we think it will take some time to get there.”
There were nearly 10 million unemployed Americans in February, almost double the pre-pandemic level, underscoring a lengthy road to recovery for the labor market. Other areas of the economy, including housing and manufacturing, have recovered much more quickly.
Private payrolls rose by 465,000 last month, which included job gains in food services, retail, health care and manufacturing, after rising 90,000 in January. The 286,000 increase in employment at restaurants was the largest since July.
Government jobs, meanwhile, declined by 86,000 in February, largely reflecting cutbacks in state and local education.
Friday's report also showed the number of Americans without work for 27 weeks or longer, known as long-term unemployed, rose to 4.15 million, the highest since August 2013 and a sign of scarring for the labor market and broader economy.