US non-farm payrolls rise by 235,000 in February, beat forecasts

Job creation in the US kept up at a solid pace in February amid solid growth in workers' earnings, eliminating the last potential hurdle for an interest rate hike at the central bank's policy meeting the following week.

Non-farm payrolls rose by 235,000 last month, beating economists' forecasts for a gain of 200,000 and the 'whisper' number of 230,000.

Average hourly earnings were ahead by 2.8% year-on-year, as expected.

The labour force participation rate, a key gauge of the job market's health followed by US policy-makers, rose from 62.9% in January to 63.0%.

In parallel, the unemployment rate ticked lower by one tenth of a percentage point to 4.7%, as expected.

Private sector job growth clocked in at 227,000, boosted by a sharp acceleration in hiring among goods-producing firms from 54,000 in January to 95,000.

Among goods-producing companies, construction sector output was ahead by 58,000, versus 40,000 in the month before, amid favourable weather conditions.

Service sector employment gains on the other hand cooled from 167,000 to 132,000, as 26,000 jobs were lost in retail trade, versus a rise of 39,900 in the prior month.

In remarks to Bloomberg TV, Mohamed El-Erian, chief economic adviser at Allianz, said the US labour market was now running "hot", adding that the more normal level of monthly job gains to expect going forward was 150,000.

The index of aggregate weekly hours expanded by 0.2% month-on-month.

As of 1357 GMT the yield on the benchmark 10-year US Treasury note was down by half a basis point at 2.60%.

"The 235,000 gain in non-farm payrolls in February will erase any lingering doubts that the Fed might not hike interest rates next week. It will also be greeted with a cheer from the White House," said Paul Ashworth, chief US economist at Capital Economics.

"In an environment where productivity is still barely rising at all, the Fed can’t allow wage growth to accelerate much above 3%."