US economy remains strong, added 273,000 jobs in Feb

US employers hired 273,000 additional workers in February and wages rose 3 percent from a year earlier, underscoring the tight labor market as companies must offer higher pay to attract and retain employees, the Labor Department reported Friday.

The number of new non-farm jobs beat estimates. Economists surveyed by The Wall Street Journal expected employers to hire 175,000 new workers.

"Notable job gains occurred in healthcare, social assistance, food services and drinking places, government, construction, professional and technical services, and financial activities," the Labor Department said.

The US economy added an average of 243,000 jobs a month December through February. In 2019, monthly job growth averaged 178,000.

Jobless claims, a proxy for employment cutbacks, declined to 216,000 last week, a historically low level.

The unemployment rate of 3.5 percent and the 5.8 million people without jobs changed little in February. The number of long-term unemployed, or those jobless for 27 weeks or more, totaled 1.1 million and accounted for 19.2 percent of those without jobs, the Labor Department said.

The unemployment rate for Asians fell to 2.5 percent, 3.1 percent for whites, 4.4 percent for Hispanics and 5.8 percent for blacks.

However the Labor Department's survey was completed prior to the spread of the coronavirus. It's unknown if employers will cut back or retain workers if the economy slows as the virus spreads. Some analysts fear employers will have difficulty filling the jobs when the economy revives in the second half of the year and therefore companies will maintain staffing at or near current levels despite any economic slowdown due to the coronavirus.

On Tuesday, the Federal Reserve cut interest rates by half a percentage point to boost the economy amid uncertainty about the coronavirus, also called Covid-19.

Lower interest rates will reduce the cost of consumer debt and borrowing for business investment. Consumer spending represents about 70 percent of the US economy.

But the Fed's decision to cut interest rates to 1.00 - 1.25 percent had no lasting effect on the stock market, which has gyrated wildly amid uncertainty created by the coronavirus.

The Labor Department's Bureau of Labor Statistics increased December's job growth by 37,000 to 184,000 from 147,000. January's total was revised up by 48,000 to 273,000 from 225,000. The revisions reflect new data and increase employment for December and January by a total of 85,000.

The Labor Department's numbers track those of the ADP National Employment Report released Tuesday that showed 183,000 private sector jobs were added in February.

ADP and the Labor Department use different methodologies.

APD's monthly job report is based on anonymous payroll data drawn from the company's 411,000 US private sector clients employing about 24 million people. The Labor Department derives its figures from a nationwide household survey.

The strong job numbers are good news for US President Donald Trump who will tout the strong economy during his re-election campaign this fall.