* Nonfarm payrolls rise 227,000 in February
* Unemployment rate steady at 8.3 percent
* Job gains reduce need for Fed action
By Lucia Mutikani
WASHINGTON, March 9 U.S. employers added
more than 200,000 workers to their payrolls for a third straight
month in February, a sign the economy was strengthening and in
less need of further monetary stimulus from the Federal Reserve.
Friday's Labor Department report, which showed nonfarm
payrolls increased 227,000 last month, also bolstered President
Barack Obama's chances for re-election.
The jobless rate held at a three-year low of 8.3 percent
even as people flooded back into the labor force to hunt for
work, and 61,000 more jobs were created in December and January
than previously thought.
"The economy, while nowhere near fully healed, has enough
momentum to move forward on its own and seems to be gaining
strength," said Megan Ellis, an economist at John Hancock
Financial Services in Boston. "For now, the Fed has little to do
except sit, wait and hope."
Stocks on Wall Street closed higher on the data,
while Treasury debt prices dipped as traders dialed down the
prospects for more bond buying by the U.S. central bank.
The dollar rallied to a near 11-month high against the yen
and was on track for a fifth straight weekly gain versus the
Japanese currency, its best run in almost five years.
Fed Chairman Ben Bernanke last week described the jobs
market as "far from normal" and said continued improvement would
require stronger demand for U.S. goods and services.
Still, he suggested the outlook would have to deteriorate
for the U.S. central bank, which meets next week, to launch
another round of monetary easing to drive interest rates lower.
A Reuters poll of 18 of the 21 big Wall Street firms that
deal directly with the Fed found that 14 expect the central bank
will eventually decide the economy needs more help, although
they scaled back expectations for how many bonds it would buy.
The labor force participation rate - the percentage of
working-age Americans either with a job or looking for one -
rose to 63.9 percent from 63.7 percent in January, suggesting
Americans are growing more optimistic on job prospects.
The workforce increased by 476,000 people, the largest gain
since April 2010. A broad measure of unemployment, which
includes people who want to work but have stopped looking and
those working only part time but who want more work, dropped to
a three-year low of 14.9 percent.
Economists are perplexed at the relative strength of the
jobs market, given still-sluggish economic growth.
Growth is expected to slow this quarter from the fourth
quarter's 3 percent annual pace, with high gasoline prices
curbing spending and a recession in Europe weighing on exports.
Consumer spending has been flat for three straight months,
and a report on Friday showed the U.S. trade deficit hit its
widest point in three years on high oil prices and record
imports, leading some economists to scale back growth forecasts.
Manufacturing registered another sturdy job-creating
performance after scoring its biggest job gains in a year in
January. There was also strong demand for temporary help, a
potential harbinger of future permanent hiring.
The U.S. unemployment rate has dropped 0.8 percentage point
since August, providing relief to Obama, who faces an election
battle in which the economy is at center stage.
The economy would need to generate about 170,000 jobs per
month to push the unemployment rate below 8 percent by the time
voters go to the polls in November.
Speaking at a Rolls Royce factory in the electoral
battleground state of Virginia, Obama said the data gave him
"confidence there are better days ahead," and he vowed to
support U.S. manufacturing in an appeal to the blue collar
voters he needs to hold the White House.
"We can't go back to the same policies that got us into this
mess. We can't go back to an economy that was weakened by
outsourcing and bad debts and phony financial profits," Obama
said. "We have got to have an economy that's built to last and
that starts with American manufacturing."
Republican presidential hopeful Mitt Romney said Obama had
promised 37 months ago that he would push the jobless rate below
8 percent with a massive government stimulus program.
"It has not been below 8 percent since. This president has
not succeeded. This president has failed and that's the reason
we're going to get rid of him in 2012," he said at campaign
event in Jackson, Mississippi.
While some parts of the jobs market have benefited from
unseasonably warm winter weather, economists say a genuine
improvement is under way, even though they expect a slight
pullback in March.
Private companies again accounted for all the job gains in
February, adding 233,000 positions. Government employment fell a
modest 6,000, but it was the sixth straight monthly decline.
Manufacturers hired 31,000 new workers, with all the gains
coming from hiring at factories that produce long-lasting goods.
Auto companies have increased production and are taking on
new workers and adding shifts and overtime to meet pent-up
demand. Output was disrupted early last year by the tsunami and
earthquake in Japan.
Although hiring is picking up pace, wage gains are sluggish.
Average hourly earnings rose just three cents in February. Over
the past 12 months, they were up 1.9 percent - a figure that has
changed little over the past year.
With gasoline prices up 49 cents since January, wages
continue to lag inflation, which could pose a hurdle to
increased consumer spending.
Outside of manufacturing, construction payrolls fell 13,000,
the first decline in four months. Temporary employment rose by
45,200 in February after climbing 32,100 in January.
Although the labor market is gaining some muscle, the pace
of improvement remains too slow to do much to absorb the 23.5
million Americans who are either out of work or underemployed.
The economy faces persistent long-term unemployment. In
February, about 43 percent of the 12.8 million unemployed
Americans had been out of work for more than six months.