Bulls Continue to Run as U.S. Unemployment Rate Drops to 7.7 Percent in February

Wall Street bulls got another reason Friday morning to continue a five-day run as the Labor Department reported the U.S. added 236,000 jobs in February and the unemployment rate dropped 0.2 percent to 7.7 percent from January to February.  The February rate represents the lowest level since December 2008 and provides further support that momentum is building in the nation’s job market.

Economists were anticipating only 170,000 jobs to be added in February and for the unemployment rate to tick down to 7.8 percent.

On Thursday, the Labor Department surprised with a report showing that initial jobless claims for the week ended March 2, 2013 dropped by 7,000 to a seasonally adjusted 340,000 pace.  Moreover, the four-week moving average fell to 348,750, marking its lowest level in five years.

February’s job additions were the highest monthly level since November, signaling that employers are confident in the economy despite recent increases in payroll taxes and political wrangling in Washington over spending cuts.  Monthly hiring has now averaged over 200,000 for the last four months.

New jobs were generally strong across the board in February.  The strengthening housing market gave support to construction, with 48,000 new jobs.  The professional and business services sector added 73,000 jobs, following only 16,000 new hires in January.  The health care industry chipped-in with 32,000 new jobs in February.  Retail trade added 24,000 new employees.

All of the new jobs happened in the private sector.  Companies added 246,000 new employees as the government cut 10,000 jobs during February.

The report showed that the average workweek for all private nonfarm employees edged up by 0.1 hour to 34.5 hours.  Factory overtime moved upward the same amount to 3.4 hours.  Manufacturing employees saw a 0.2 hour increase in hours worked to 40.9 hours per week in February.

Average hourly earnings for all private nonfarm employees increased by 4 cents to $23.82 and have increased 2.1 percent in the last year.

In probably the only soft spot of the report, the total change in nonfarm payrolls in January was downwardly revised from an increase of 157,000 to only 119,000.  December figures were, however, upwardly revised from 196,000 new jobs to 219,000.

Early in Friday’s trading session, the Dow Jones Industrial Average is up by 52 points, the S&P 500 is ahead 5 points and the Nasdaq has advanced 10 points.  Printing as high today as 1,549.09, the S&P 500 is closing in on record highs of 1,576.09 set in October 2007.