Payrolls climbed in 36 US states in February led by California

[WASHINGTON] Payrolls rose in 36 states in February and the unemployment rate dropped in 22, a sign labour market slack is gradually diminishing in the US economy.

California led the nation with an almost 40,000 increase in employment, followed by a 25,100 advance in New York, figures from the Labour Department showed Friday. Jobless rates in New Hampshire and South Dakota were the lowest in the nation at 2.7 per cent.

"People are not getting laid off at a sharp clip right now, hiring seems to be rock solid," said Stephen Stanley, chief economist at Amherst Pierpont Securities LLC in New York. "In the labour market, everything is good." New Hampshire and Hawaii showed the biggest per centage gain in employment with 0.7 per cent increases, followed by Arkansas and Utah at 0.5 per cent. States where payrolls declined included North Dakota, Iowa and Delaware.

The biggest decrease in the unemployment rate occurred in Tennessee, where joblessness fell by 0.5 percentage point to 4.9 per cent in February. Wyoming showed the largest statistically significant increase, with the rate climbing to 5 per cent from 4.7 per cent.

Alaska had the nation's highest unemployment rate in February, at 6.6 per cent.

State and local employment data are derived independently from the national statistics, which are typically released on the first Friday of every month. The state figures are subject to larger sampling errors because they come from smaller surveys, thus making the national figures more reliable, according to the US Bureau of Labour Statistics.

That report showed payrolls across the US climbed by 242,000 in February after a 172,000 increase that was bigger than initially estimated. The unemployment rate held at an eight-year low of 4.9 per cent, offering further proof that the labour market is tightening. The fly in the ointment remains growth in average hourly earnings, which climbed 2.2 per cent in February from the year before, the least in seven months.

Federal Reserve policy makers are keeping an eye on how the U.S. economy weathers a global slowdown and financial-market volatility as they consider the timing of their next interest- rate increase. They held off on raising borrowing costs at a meeting in March.

Speaking to reporters after the meeting, Fed Chair Janet Yellen said she was "somewhat surprised" at the lack of acceleration in wage growth despite improvement in the employment picture.

"The fact that we have not seen any broad-based pickup is one of the factors that suggests to me that there is continued slack in the labour market," she said.

BLOOMBERG