By Jeffry Bartash, Reporter
March 6, 2015

WASHINGTON (MarketWatch) — The U.S. economy churned out a robust 295,000 jobs in February, reducing the nation’s unemployment rate to the lowest level in almost seven years and extending the best stretch of job creation since the mid-1990s.

The latest employment report offers more proof the economy is likely to continue to chug along in the wake of the biggest spurt of hiring since the Clinton era. Many economists think the U.S. might achieve 3% annual growth in 2015 for the first time in a decade.

“The U.S. labor market is on fire,” said Neil Dutta, head of economics at Renaissance Macro Research.

The unemployment rate fell to 5.5% from 5.7%, marking the lowest level since May 2008 in the early stages of the Great Recession. In a mixed bag, more people found jobs, but more people also dropped out of the labor force.

Despite a prolonged surge in hiring, the wages of U.S. workers still aren’t growing very fast. Hourly wages rose 3 cents, or a scant 0.1%, to $24.78 — a disappointment after a sharp 0.5% uptick in January that was boosted in part by a number of states raising their minimum wage.

Over the past 12 months wages have risen a mediocre 2%, about two-third as fast as they usually grow when the economy is expanding rapidly. Earnings have to rise faster to spur the economy to new heights, and analysts expect all the new hiring to eventually to deliver more pay for workers, but the slow pace of wage growth remains a puzzle.

The percentage of Americans in the labor force, meanwhile, continued to hover near the lowest level since the late 1970s. The so-called labor-force participation rate fell a notch to 62.8% in February.

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