The U.S. economy created 262,000 new jobs in February, the best showing in four months. This good news combined with a slight decline in oil prices from near record highs sent the stock market soaring.
The increase brought total employment in the United States to just under 133 million. However, because the labor force grew during February even more than the jobs that were created, the unemployment rate rose slightly to 5.4 percent.
All major sectors of the economy added jobs in February with even the hard-pressed manufacturing sector creating 20,000 jobs. Construction added 30,000 and the service sector added over 200,000 jobs.
Jim Smith, an economist at the business school at the University of North Carolina, believes the economy will continue to add jobs throughout 2005. He says the recovery from the job losses associated with the collapse of technology boom of the late 1990s is more or less complete.
"When all those people got laid off as a result of the dot com bust [the stock market and economic decline that began in 2000], it just took a long time to get payroll employment back," he said. "But, the good news is it is back and every month this year ought to be a new record."
The employment data combined with last week's report of economic growth of 3.8 percent reflects overall strength. Even with oil prices near record levels, inflation remains under control at under four percent. Oil prices Friday retreated slightly from the $55 a barrel level reached earlier. This news, combined with the employment report, sent stock prices on Wall Street sharply higher. In late morning the Dow Jones industrial average reached a 3.5 year high.
In a separate report, a closely watched gauge of consumer sentiment registered a modest decline in February. Consumer sentiment is an early indicator of consumer spending, which accounts for two thirds of U.S. economic activity.