US economy getting stronger, Barack Obama says after positive jobs report

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President Barack Obama said on Friday the US economy was ‘getting stronger’ after the release of figures showing more than 220,000 new jobs were created last month.

Obama said that the data gave him confidence that better days were ahead after touring a Rolls Royce plant which makes components for jet engines, during a trip to the key general election swing state of Virginia.

The US economy continued to pump out jobs in February despite slower growth, enough to hold the overall jobless rate at a three-year low of 8.3 per cent, the Labour Department said.

The economy created 227,000 new jobs in February, topping the 200,000 mark for the third straight month and more than enough to absorb new entrants into the job market.

After falling for five straight months from 9.1 per cent in August, the unemployment rate was unchanged from December's reading, the best level since January 2009 when the economy was mired in a deep recession.

At its peak in October that year, the jobless rate hit 10.0 per cent, and has only crept back down at a slow pace since then.

The White House, fighting to convince voters ahead of the November presidential election that President Obama has put the economy back on track, tied the February numbers to its policies.

"Today's employment report provides further evidence that the economy is continuing to heal from the worst economic downturn since the Great Depression," said the Obama's administration's chief economic adviser Alan Krueger.

"It is critical that we continue the economic policies that are helping us dig our way out of the deep hole that was caused by the recession that began at the end of 2007," he said in a statement.

The February job creation numbers surprised analysts, who expected a somewhat more muted performance as economic growth eases from 2011's peppy fourth quarter.

But they said it was a sign of the firm footing of growth even if it remains somewhat tepid.

"US economy watchers can breathe a sigh of relief for now as employment growth... exceeded expectations and the economy created enough jobs to absorb re-entrants into the labor market," said John Ryding and Conrad DeQuadros at RDQ Economics.

"The employment gains appeared broad-based with manufacturing and business services showing particularly encouraging gains," they said.

"On the whole this report provides further evidence that the economy is on a steady growth path. Unusually good weather has likely boosted employment in the last three months, which means that future growth will be slower," said Dean Baker of the Center for Economic Policy and Research.

"Still, a pace of 200,000 jobs a month seems likely," he said.

Job creation numbers for the previous two months were revised higher, putting the three month average at 245,000 net new jobs per month, sharply above the 2011 12-month average of 153,000.

In another sign of the underlying strength of the economy, the overall participation rate in the jobs market picked up to 63.9 per cent, and the employment-population ratio also rose.

Those figures underscored that the fall in the jobless rate was coming from new positions being created rather than people dropping out of the job market altogether, as was the case during part of 2011.

Hiring was broad-based and came entirely from the private sector as government layoffs continued around the country.

Jobs in manufacturing, a focus of the Obama administration, also picked up, for a three-month net gain of 111,000.

The number of net government layoffs was low in February, just 6,000. In a positive sign, even as the federal and state governments continued to shed workers, local authorities turned into net hirers.

A much higher level of layoffs at all levels of government were a key reason why the overall jobs market failed to gain traction over the first half of last year.

Still, the overall official number of unemployed Americans held at 12.8 million, little changed from the previous month, and economists were forecasting that, with the federal government under heavy pressure to cut spending and trim payrolls, that would likely only fall at a slow pace.

"At this rate the economy will not make up the shortfall in jobs until the end of the decade," said Baker.