The U.S. unemployment rate edged up to 6.7 percent in February, but it happened for a good reason—more people entered the labor force, presumably because they were encouraged about their chance of finding work in a strengthening economy.
The Bureau of Labor Statistics said today that according to its survey of employers, payrolls rose 175,000, which was above the median forecast of 149,000 in a Bloomberg survey of economists. The unemployment rate ticked up because not all the people who flooded into the labor force in search of work were able to find it right away.
“We see things improving,” Kathy Bostanjcic, director of macroeconomic analysis at the Conference Board, said in a note after the report.
Capital Economics’ Paul Dales said in a note that the jobs report was strong enough that it “pretty much guarantees” the Federal Reserve will continue to taper its bond-buying.
Bad winter weather probably held down job growth. About 600,000 people couldn’t get to work because of bad weather, which Dales said is double the usual for February. Even though most of them were still counted as employed, it’s an indication that bad weather probably affected the hiring process. The government said the average workweek for all employees on private nonfarm payrolls edged down by 0.1 hour (i.e., six minutes), to 34.2 hours in February.
There’s still no evidence that the expiration of federal emergency jobless benefits has prompted people to drop out of the labor market, Marc Chandler of Brown Brothers Harriman said in a note to clients.