Employers in the United States extended a good hiring streak to the month of February as 295,000 jobs have been added, with the month marking the 12th consecutive monthly increase of over 200,000 jobs.
The trend marks the longest such stretch since 1994 to 1995.
According to the Labor Department, the unemployment rate decreased slightly from 5.7 percent to 5.5 percent. However, the additional jobs were not able to increase wages significantly, as the average wage per hour increased by only 3 cents last month to $24.78.
Over the previous 12 months, a total of 3.3 million Americans have been able to get hired. The increased number of jobs and fallen gasoline prices have led to many consumers increasing their spending, which boosts the country's economy and gives companies the confidence to employ more people.
The newfound strength of the United States job market may give the Federal Reserve the room to be able to raise interest rates from previous record lows. Analysts are expecting that the Federal Reserve will be shooting for the higher rates through adjustments on statements that it will be issuing after its policy meeting in March, which will be followed by the first increase in either June or September.
The economy and job market of the United States are currently in a better position compared with those of other major countries. While Japan and Europe are displaying signals of increased growth compared with 2014, their economies are still unstable. The European Union's rate of unemployment has begun to decrease, but the rate is still almost twice what is seen in the United States.
However, despite the good figures, the job market in the United States may not be as healthy as it seems.
The government said that the decrease in unemployment rate may be due to many job hunters simply giving up their search for work, which pulled them out from the official count of unemployed people.
An unemployment rate of 5.5 percent is what economists can call as "full employment," which is when the percentage of unemployed people is so low that employers are being forced to raise wages to be able to hire qualified employees. Companies will then raise their prices to offset the higher wages that they pay, with the Federal Reserve then increasing its benchmark short-term rate to prevent inflation.
However, as mentioned, wage prices are holding steady. This could mean that the 5.5 percent figure does not mean "full employment" any more, with the target percentage actually much lower, said Mesirow chief economist Diane Swonk.
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