Economy added 97,000 payroll jobs in February

Reuters

The U.S. economy added a modest 97,000 jobs in February, the smallest gain in two years, but job growth in prior months was stronger than first thought and the unemployment rate dropped, the government said on Friday, easing fears over economic weakness.

Also, the unemployment rate edged down to 4.5 percent from 4.6 percent, helping allay mounting concern that softening was spreading beyond the struggling manufacturing and housing sectors.

Analysts polled by Reuters were expecting the economy to add 100,000 jobs outside of the farming sector in February and for the jobless rate to hold steady at 4.6 percent.

Construction employment fell 62,000 in February, probably prompted by cold and stormy weather in much of the country, the government said.

Manufacturing employment shed 14,000 positions.

Average hourly earnings rose by 6 cents, or 0.4 percent, in February.

A separate report from the Commerce Department showed a narrowing of the trade gap after it set an annual record for the fifth straight year in 2006.

Health care, which accounted for one in six jobs added to U.S. payrolls in the last 12 months, added 33,000 jobs in February, the government said.

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