The U.S. economy added 235,000 jobs in February, according to government data released Friday, strong growth that likely cleared the way for the Federal Reserve to raise rates this month.
The figure outstripped the estimate of economists surveyed by Bloomberg, who had been looking for an addition of 200,000 jobs in the first full month of Donald Trump’s presidency.
The unemployment rate ticked down to 4.7 percent, compared with 4.8 percent in January. Wages rose by 6 cents to $26.09, following a disappointingly low 3-cent increase the month before.
“It’s definitely a solid report,” said Tara Sinclair, an economist at George Washington University. “This is the kind of number that the Federal Reserve was looking to receive before their meetings next week.”
Educational services, manufacturing, health care and mining accounted for much of the hiring last month. Construction employment surged, as unseasonably warm weather in many states allowed crews to work throughout February.
The Labor Department also revised its estimates for job creation in December and January, increasing the number of jobs added to 9,000 more than previously reported. December was revised down from 157,000 jobs to 155,000, and the change for January was revised up from 227,000 jobs to 238,000.
The release of February’s jobs data was widely seen as the final hurdle before the Federal Reserve’s March 14-15 meeting, when the central bank is expected to announce an increase in its benchmark interest rate.
Shortly after the release of the jobs data Friday morning, the odds of a March rate increase had climbed to more than 90 percent, up from only 25 percent at the beginning of February, according to futures contracts monitored by the CME Group’s FedWatch program.
A separate survey published early in the week by ADP and Moody’s Analytics showed the private sector adding 298,000 jobs in February, blowing past economists’ expectations for a figure of 189,000.
Measures of business and consumer confidence have risen in recent months, due in part to the continued long-run recovery of the economy and expectations of a more business-friendly environment under the Trump administration. In early March, Gallup’s U.S. Economic Confidence Index, a measure of how Americans rate current economic conditions, rose to the highest level in its nine-year history.
On Wednesday morning, President Trump tweeted that January and February were “the strongest consecutive months for hiring since August and September 2015,” citing a report on the workforce by social networking site LinkedIn.
Trump’s ambitious pledges to slash corporate taxes, cut regulations and boost spending on infrastructure have helped push stock markets to record highs in recent weeks. Yet some economists question whether other pledges, such as a federal workforce hiring freeze, a reduction in immigration and a more combative attitude toward international trade, could ultimately weigh on growth.
The administration is already confronting the challenge of translating campaign trail promises into legislation as it prepares to issue a portion of its budget around March 16.
Strong economic data in recent months appears to have persuaded the Federal Reserve that it can lift interest rates without hurting the labor market. Last Friday, Fed Chair Janet Yellen added her voice to a chorus of Fed governors and reserve bank presidents who had signaled in public speeches that a rate hike was likely to come this month.
“On the whole, the prospects for further moderate economic growth look encouraging,” Yellen said in a speech to the Executives Club of Chicago.
Josh Feinman, chief economist at Deutsche Bank Management, said the March rate hike doesn’t mean the Fed will tighten monetary policy more aggressively in the years to come. “They’ll probably say rates will stay fairly low, a shallow trajectory. But look, the economy looks like it’s making progress,” he said. “We don’t need zero rates anymore.”