U.S. gains 227,000 jobs in February

WASHINGTON (MarketWatch) � The U.S. created 227,000 jobs in February and more people found work in the prior two months than initially reported, the government said Friday, suggesting the economy�s recent momentum is likely to continue.

The unemployment rate was unchanged at 8.3% as nearly half-a-million workers re-entered the labor force in search of jobs, the Labor Department reported. That�s usually a good sign because it means people believe more work is available.

The increase in nonfarm jobs topped 200,000 for the third straight month, which reinforces the view of an economy gathering strength as 2012 unfolds. The past three months of full-time job growth � aided by unusually warm winter weather � is the fastest since the end of the 2007-2009 recession and marks the best performance since early 2006.

The influx of new jobs is also pumping more cash into the economy in the form of wages and salaries, generating fresh demand among consumers for the goods and services that businesses produce. Consumer spending accounts for 70% of U.S. economic growth.

If that keeps up, businesses might have to hire more workers to meet the rising demand, further underpinning the economic recovery.

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Improved job growth exceeded Wall Street estimates. Economists surveyed by MarketWatch had predicted an increase of 213,000 jobs on a seasonally adjusted basis, with unemployment holding steady at 8.3%.

Adding to the picture of a rebounding economy were upward revisions in employment for January and December.

Job gains for January were revised up to 284,000 from 243,000 � the best month of job growth in six years. Net hiring in December was revised up to 223,000 from 203,000.

U.S. stocks SPX �moved higher Friday after the jobs report. The Dow Jones Industrial Average was up about 50 points in midday trades.

The increase in jobs heartened Democrats in Washington while Republicans pointed to the high jobless rate as evidence that the Obama administration�s economic policies are not working. The health of the economy could be the deciding factor in the 2012 presidential election.

Smooth sailing ahead?

While economists applauded the employment report, many are skeptical the U.S. will continue to add jobs at the same pace as in the last three months.

Some question the accuracy of the government�s method for adjusting to seasonal swings in hiring. And others say good weather likely accelerated job growth in early 2012, but perhaps at the expense of job creation later in the spring.

�The mild winter has been a net positive for the labor market over the last few months. That�s something to keep a close eye,� said Ryan Sweet of Moody�s Analytics. �I don�t think 227,000 new jobs a month is going to be the new norm. I think it will ratchet back a bit.�

Economists also point to higher gas prices, stagnant wages, a downturn in Europe and slower growth in China as potential drags on U.S. expansion.