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Robust US job growth boosts economy as coronavirus rages
[WASHINGTON] US employers maintained a robust pace of hiring in February, giving the economy a strong boost as it confronts the coronavirus outbreak that has stoked financial market fears of a recession and prompted an emergency interest rate cut from the Federal Reserve.
The Labour Department's closely watched monthly employment report on Friday also showed solid monthly wage growth and the jobless rate falling back to near a 50-year low of 3.5 per cent. Employers also increased hours for workers last month.
While the upbeat report likely does not fully capture the impact of the coronavirus, which spread in the United States beginning in late February, there are so far no signs that the epidemic has hurt the labour market.
Layoffs remain low and small businesses and services sector industries continue to hire at a solid clip.
The Fed on Tuesday slashed its benchmark overnight interest rate by a half percentage point to a target range of 1.00 per cent to 1.25 per cent, in the US central bank's first emergency rate cut since 2008 at the height of the financial crisis.
Fed Chair Jerome Powell acknowledged the economy's strong fundamentals, but said "the coronavirus poses evolving risks to economic activity."
Nonfarm payrolls increased by 273,000 jobs last month, matching January's tally, which was the largest since May 2018. While transportation and warehousing payrolls fell by 4,000 jobs last month, showing some early impact from the coronavirus, they were more than offset by strong gains nearly across all sectors, including government. The economy created 85,000 more jobs in December and January than previously reported.
Economists polled by Reuters had forecast payrolls increasing by 175,000 jobs in February. The economy needs to create roughly 100,000 jobs per month to keep up with growth in the working-age population. Employment gains averaged 243,000 per month in the last three months.
The jobless rate fell to 3.5 per cent last month. It increased one-tenth of a percentage point to 3.6 per cent in January as more people joined the labour force, in a sign of confidence in the job market.