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Jeff Cox | @JeffCoxCNBCcom
Published: March 9, 2018

  • Nonfarm payrolls rose by 313,000 in February while the unemployment rate remained at 4.1 percent, the lowest since December 2000.
  • Wage growth was muted, however, with average hourly earnings up 2.6 percent on an annualized basis, 0.2 percentage points below expectations
  • The stock market rallied after the report.

The economy added 313,000 jobs in February, crushing expectations, while the unemployment rate remained at 4.1 percent, according to a Labor Department report Friday that could help quell inflation fears.

Economists surveyed by Reuters had been expecting nonfarm payroll growth of 200,000 and the unemployment rate to decline one-tenth of a point to 4 percent.

An increase in the labor force participation rate to its highest level since September helped keep the headline unemployment number steady, as the number of those counted as not in the workforce tumbled by 653,000 to just over 95 million.

The total counted as “employed” in the household survey surged by 785,000 to a record 155.2 million.

A separate measure that takes into account those out of the workforce and the underemployed — sometimes referred to as the “real” unemployment rate — held steady at 8.2 percent.

Stocks surged following the report, with the Dow industrials up 375 points Friday afternoon after being slightly negative before the news.

“The underlying economic growth is quite strong, but there’s no real pressures from a wages and inflation standpoint,” said Greg Peters, senior investment officer at PGIM Fixed Income. “It’s very good for risk assets.”

Construction jobs led the way, with 61,000 new positions, followed by retail and professional and business services (50,000 apiece), manufacturing (31,000) and financial activities (28,000). Health care added 19,000 while mining saw 9,000 new jobs.

“The jobs streak remains intact, and it’s punctuating what has been a tremendous start to the year,” said Mike Loewengart, vice president of investment strategy at E-Trade.

Investors were watching the report closely not only for clues about job growth but also whether wage pressures were continuing to build. Wage growth came in less than expected, rising 0.1 percent for the month and 2.6 percent on an annualized basis.

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