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Updated: U.S. Economy Creates 295K Jobs In February

By Kitco News
Friday March 6, 2014 8:30 AM

Editor's Note: The article was updated with more information from the report. The report was updated a second time to include comments from TD Securities and Capital Economics.

(Kitco News) - The labor market continued to show strong momentum as the U.S. Labor Department released a stronger-than-expected nonfarm payrolls report for February.

Friday, the Bureau of Labor Statistics said 295 jobs were created in February, up from January’s downwardly revised level of 237,000; January’s initial report pegged the growth at 257,000 jobs.

According to consensus reports, economists expected to see about 240,000 jobs created last month.

Jim Wyckoff, senior technical analyst at Kitco.com noted that gold prices are selling off dropping to a session low of $1,183.10 an ounce in the initial reaction.

The report said that the unemployment rate fell to 5.5%, down from January's reading of 5.7%, as the economy saw a broad range of job growth.

"Job gains occurred in food services and drinking places, professional and business services, construction, health care, and in transportation and warehousing," the report said. However, employment in the mining sector was down last month.

Employees only saw moderate growth in their pay last month as the department said that average hourly earnings rose by 3 cents to $24.78. Average hourly earnings’ have rise 2.0% in the last 12 months. The work-week remained unchanged for the fifth consecutive month at 34.6 hours.

Despite January’s downward revision, Eric Green, head of U.S. rates and economic research at TD Securities, said that the underlying data showed a strong labor market.

“This reinforces our view that the Fed will tweak guidance (90% probability) or drop "patient" altogether (65% probability) at the March meeting. That will bring June into play, though odds still low that is the timing of lift-off,” he said.

Paul Dales, senior U.S. economist at Capital Economics agreed that the stronger-than-expected report will raise expectations the Federal Reserve will hike rates soon rather than later.

“Even if wage growth is still subdued, the Fed can’t hang around before raising rates,” he said. “But if the Fed waits until wage growth rising, they will be well behind the curve.”

By Neils Christensen of Kitco News; nchristensen@kitco.com
Follow Neils Christensen @neils_C



Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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