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US non-farm payroll surges past expectations in February

US non-farm payroll figures show unemployment at 6.2%

US non-farm payroll figures significantly outperformed expectations for February, as 379,000 jobs were added to the US economy.

The figure surpassed the expected amount of 180,000, as well as exceeding January’s increase of 160,000, which was revised up from the originally reported 49,000 figure reported a month ago.

The December number was also revised to 306,000 from 220,000.

Unemployment is now at 6.2%, down from 6.3% in January, and well below April’s peak high of 14.7%.

A majority of the jobs (355,000) came from the leisure and hospitality sector, as dining restrictions were eased in parts of the country.

While healthcare, manufacturing and retail saw 46,000, 21,000 and 41,000 jobs added respectively.

Year-on-year, 8.5m fewer Americans are in work compared to February 2020.

Robert Alster, CIO at investment management firm Close Brothers Asset Management, praised the progress of the US economy, while drawing attention to underlying factors at play in the US labour market.

“The dramatic increase in nonfarm payroll figures is a sign of progress as Biden completes his sixth week in office. However, it comes after a relatively weak ADP reading for private payroll figures earlier in the week, painting a picture of a labour market of two halves.”

“Wage inflation remained steady – growth looks somewhat unlikely as lower-paid workers re-join the payrolls in the coming months as hospitality and retail sectors open up.”

Alster suggested the news is a continuation of a recent trend of economic optimism since Biden was inaugurated.

“Nonetheless, Biden’s pledge for all US adults to have received the vaccine by the end of May, a drop off in coronavirus cases, and tentative relaxation of restrictions all bode well for a continued improvement in the employment numbers.”

“A further boost will be given once the $1.9tn Covid-19 stimulus bill reaches the Resolute desk. With the injection of the vaccine and cash, the President will be hoping he can get the US economy back on the front foot.”

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