MNI DATA IMPACT: US Feb Payrolls Up Most Since Oct

U.S. job growth in February was the fastest since October on gains in leisure and hospitality, the Bureau of Labor Statistics said Friday, though high rates of long-term unemployment mean Federal Reserve officials may dismiss the gain.

The economy added 379,000 jobs, well above the 200,000 increase forecast by the Bloomberg consensus that industry experts interviewed by MNI this week called "overly optimistic." January's 49,000 gain was revised up to 166,000.

Private payrolls were up 465,000, led by a 355,000 increase in leisure and hospitality. Smaller increases came from temporary help services (52,700), health care and social assistance (45,600), and retail trade (41,100). Government payrolls fell 86,000 in February, as both local and state education lost upwards of 30,000 jobs each.

Fed officials are looking for a substantial rebound in labor force participation as they push ahead with USD120 billion a month of asset purchases to boost the economy. The participation rate held steady at 61.4% while the employment-population ratio added just a tenth to 57.6%. Treasuries traded lower on the report, with the benchmark 10-yr note last at 1.595%, extending the move seen from Thursday's U.S. session.

The unemployment rate fell by a tenth to 6.3%, the lowest since March, though still higher than last February's 3.5% that was a midcentury low. Among the unemployed, the number of people on temporary layoff fell by 517,000 in February to 2.2 million, while the number of permanent job losers was essentially unchanged at 3.5 million.

The median duration of unemployment shot up to 18.3 weeks in February from 14.5 weeks in January.

Long-term unemployment, or those jobless for six months or more, was roughly unchanged at 4.1 million, accounting for 41.5% of the total unemployed.

The number of people not in the labor force who currently want a job was little changed at 6.9 million but was up 1.9 million from one year ago. These individuals were not counted as unemployed because they were not actively looking for work sometime in the last four weeks.

The U-6 rate, which accounts for discouraged workers, held steady at 11.1%.