WASHINGTON - Nonfarm U.S. payrolls increased by 192,000 in February as private sector payrolls jumped by 222,000, while the unemployment rate edged lower to 8.9%, the Labor Department reported Friday.
Total payrolls for January and December were revised higher, adding a combined 58,000 to the work force.
The manufacturing sector added 33,000 for the month with most of the gains coming in durable goods industries. Construction-sector employment snapped back, adding 33,000 jobs in February after disruptive winter storms in January caused temporary layoffs.
The unemployment rate, at 8.9%, is the lowest since April 2009. The 222,000 gain in private payrolls was the largest since April 2010.
January private payrolls were revised up to a gain of 68,000 from a 50,000 increase reported last month.
Economists expected 178,000 total non-farm payrolls and 185,000 private sector payrolls, according to the median estimate from Thomson Reuters. They expected the unemployment rate to drift up to 9.1%.
State and local payrolls shrank by 30,000 in February while federal payrolls were flat. Municipal governments are continuing to cut spending to balance their budgets, a factor many economists said will be a headwind to economic and employment growth this year.
State and local job losses “may be one of the negative surprises awaiting us in 2011,” said John Lonski, chief economist at Moody’s Capital Markets Group, speaking before the report. He said the state and local sector will be a “major drag” to economic growth this year.
Average hourly earnings for all employees increased by 1 cent to $22.87 in February. Over the last 12 months, average hourly earnings have increased by 1.7%.
The average workweek for all employees was unchanged at 43.2 hours.
Economists expected average hourly earnings to increase 0.2% and for the workweek to increase to 34.3 hours.
The 10-year Treasury yield closed at 3.57% on Thursday and the 30-year bond yield increased to 4.63%, both the highest levels in two weeks. The yield gains were partly attributable to favorable initial jobless claims data released on Thursday as market participants expected strong employment numbers for February.
