WASHINGTON (CBS.MW) - The U.S. economy still has a lot of kick left.
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U.S. businesses added 135,000 net new jobs in February, the Labor Department said Friday, putting to rest any ideas that the economy is flat on its back.
The unemployment rate stayed at 4.2 percent while average hourly earnings jumped 0.5 percent.
The strong headlines from the report end all talk of an emergency rate cut from the Federal Reserve before its next scheduled meeting on March 20.
In fact, Wall Street may begin to scale back its expectations of a 50-basis-point cut at the meeting, given the surprising strength in some sectors of the economy lately and the big jump in wages in this report.
However, the data show that the economy hasn't yet recovered. Total hours worked in the private sector fell 0.5 percent, a sign that job growth doesn't necessarily translate into higher output.
Economists surveyed by CBS.MarketWatch.com had expected just 62,000 new jobs in February and though the jobless rate might inch up to 4.3 percent. They thought average pay would grow by 0.3 percent.
January's job gains were revised lower to 224,000 from 268,000.
The economy has split in two: Manufacturing is in recession while the service sector (which provides about 80 percent of all jobs) is growing.
Manufacturing industries shed 94,000 jobs after losing 96,000 in January. Even the electronics industry lost 9,000 jobs. The auto industry added 13,000 jobs.
The average workweek in the factory sector fell another 18 minutes to 40 hours and 36 minutes. Total hours worked in manufacturing dropped 1.4 percent.
Meanwhile, the services added 210,000 jobs, the strongest performance since May. The erosion in temporary help jobs paused, while health care, social services, mortgage banking, retail and computer services showed gains.
Total hours worked in the services sector fell slightly.
Rex Nutting is Washington bureau chief of CBS.MarketWatch.com.
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