2018.03.1121:04:00UTC+00U.S. Economy Adds Biggest Number of Jobs in Over 1-½ Years in February

The US added 313,000 new jobs in February – the strongest gain since July 2016 – while the jobless rate remained steady at 4.1 percent. However, a slowdown in wage growth pointed to only a gradual rise in inflation in 2018.

According to the Labor Department, non farm payrolls increased by 313,000 jobs in February, lifted by the biggest growth in construction jobs since 2007.

The payrolls gain was the most since July 2016 and triple the roughly 100,000 jobs the economy needs to create each month to keep up with growth in the working-age population. Data for December and January were revised to show the economy creating 54,000 more jobs than previously reported.

The labor market is benefiting from strong domestic demand, an improvement in global growth, and strong U.S. business sentiment following passage of the Trump administration's $1.5 trillion tax cut package. The tax reductions came into effect in January.

The blowout payrolls number cemented expectations the Federal Reserve will hike interest rates at its March 20-21 policy meeting.

Sluggish wage growth, however, left economists divided on whether the U.S. central bank would upgrade its rate forecast for this year to four hikes from three.

Wages have lagged behind the growth in employment since the last recession. In February, average hourly earnings increased by only 0.1 percent a month earlier, below economists' projections of 0.2 percent and January's 0.3 percent rise.

The US jobs market has now added an average of 242,000 jobs each month over the past three months. However, the still slow growth in wages implies that while people who were on the margins are returning to work, the jobs being created are still lower wage.