US jobs rise at fastest rate in two years in February, but wage growth cools

It was the biggest monthly increase in American non-farm payrolls since July 2016

One of the sectors in which the US saw jobs gains in February was construction

The US added an impressive 313,000 jobs in February, but wage growth cooled, according to the latest official employment report.

It was the biggest monthly increase in American non-farm payrolls since July 2016. January’s figure was also revised up to 239,000 from 200,000.

However, average earnings rose by only 2.6 per cent year on year, down from the 2.9 per cent figure published last month that some analysts claimed had set off February’s major stock market sell-off, on the back of expectations that strong inflation was finally returning to the world’s largest economy.

The January wage growth figure was revised down to 2.8 per cent.

Biggest gain since July 2016

The overall unemployment rate was unchanged in February at 4.1 per cent.

The greenback zigzagged in response to the mixed data, with the dollar shooting up to 90.343 before rapidly falling to 90.122.

But some analysts said the data was strong enough for the Federal Reserve and its new chair Jerome Powell, who took over from Janet Yellen in early February, to continue tightening monetary policy.

“Strong non-farm payrolls seals the deal for the pre-programmed and priced Fed rate hike in March and probably for one in June too,” said Erik Norland of CME Group.

Others suggested the data would please the White House.

“[Donald] Trump will be grinning like a cheshire cat as the domestic economy has once again hailed impressive labour market figures, allowing his ally Mr Powell to aim for four rate hikes this year,” said Alex Lydall of Foenix Partners.

The US Bureau of Labour Statistics said that the US saw jobs gains in February in construction, retail trade, manufacturing and mining, among other areas.