US employment growth accelerated in February

US employment growth accelerated in February and the jobless rate fell to a more than six-and-a-half-year low of 5.5%, signs that could encourage the Federal Reserve to consider hiking interest rates in June.

Non-farm payrolls rose 295,000 last month after rising 239,000 in January, the Labour Department said yesterday. The job gains came despite disruptive weather conditions that took hold across large parts of the country in mid-February.

The decline in the unemployment rate from 5.7% in January took it to its lowest level since May 2008 and near what many Fed officials consider to be full employment.

“We feel the economy is in a position for the Fed to begin normalising policy. We think it is on the path to make a rate change in June,” said Sam Bullard, a senior economist at Wells Fargo Securities in Charlotte, North Carolina.

The data suggested the US job market continued to strengthen last month, although the drop in the jobless rate largely reflected people leaving the labour force.

The dollar rallied to a fresh 11-and-a-half-year high against several currencies on the report, while prices for US Treasury debt fell. US stocks were generally trading lower.

Average hourly earnings rose by three cents last month.

Reuters