U.S. payrolls data buoy job creation hopes
By Lucia Mutikani, Reuters
March 7, 2010, 2:27 pm TWN
WASHINGTON -- U.S. employers cut fewer jobs than expected during snow-battered February and the unemployment rate held steady at 9.7 percent, bolstering views the economy was on the brink of creating jobs.
President Barack Obama, whose approval ratings have dropped partly because of high unemployment, said the figures showed measures his administration took to boost the economy were working but that unemployment was still too high.
Nonfarm payrolls fell 36,000, the Labor Department said on Friday, adding it was unclear how the severe snowstorms that hit much of the country last month had affected employment.
Financial markets had expected payrolls to drop 50,000 in February and the unemployment rate to edge up to 9.8 percent.
“If we did not have bad weather, then this number would have been solidly positive. It tells me the economy and the job markets have evolved to the point where we are now ready to produce jobs,” said Phil Orlando, chief equity market strategist at Federated Investors in New York.
Not only were February's job losses lighter than had been expected, layoffs in the prior two months were 35,000 less than previously reported.
U.S stocks rallied as the data allayed fears of a labor market setback that had been fanned by a string of reports showing an increase in new claims for jobless benefits. Both the Dow Jones industrial <.DJI> and the Standard & Poor's 500 index <.SPX> closed at their highest levels in six weeks.
Prices for U.S. government debt tumbled, while the dollar soared versus the yen.
In the wake of the report, U.S. short-term interest rates showed investors thought the Federal Reserve, which has vowed to keep borrowing costs ultra low for an “extended period,” could raise its benchmark rate from its current zero to 0.25 percent range by November.
Bad Weather a Factor
Since the economy fell into recession in December 2007, 8.4 million jobs have been lost. Job growth is crucial to sustain the recovery, which started in the second half of last year.