Solid jobs growth bolsters recovery hopes

Fri Mar 9, 2012 10:23am EST
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By Lucia Mutikani

WASHINGTON (Reuters) - Employment grew solidly for a third straight month in February, a sign the economic recovery was strengthening and in less need of further monetary stimulus from the Federal Reserve.

Employers added 227,000 jobs to their payrolls last month, the Labor Department said on Friday, while the unemployment rate held at a three-year low of 8.3 percent even as people flooded back into the labor force to hunt for jobs.

Not only was job growth a bit stronger than the 210,000 economists polled by Reuters had expected, but the government said 61,000 more jobs were created in December and January than previously thought.

Nonfarm payrolls have now grown by more than 200,000 for three months in a row - bolstering President Barack Obama's chances for re-election. Employment growth has averaged 245,000 a month over the last three months.

"It looks like the economy is starting the year with some positive news for consumers and households," said Gary Thayer, chief macro strategist at Wells Fargo Advisors in St. Louis.

"The trend is toward better jobs data with companies showing more conviction that the economy is finally gaining strength."

Stocks opened modestly higher on the report, while prices for Treasury debt fell as traders dialed down the prospects for more bond buying by the Fed. The dollar rallied broadly.

"I think we'll begin to ... debate about the Fed exiting its ultra-accommodative policy stance sooner than expected," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.   Continued...

People talk with a job recruiter (R) while they attend the "JobEXPO" job fair in New York, January 25, 2012. REUTERS/Eduardo Munoz