US employers add 175,000 jobs despite harsh weather

By By The Associated Press

WASHINGTON — U.S. employers stepped up hiring in February despite a blast of harsh winter weather, renewing hopes that

the economy could accelerate this year.

February's gain of 175,000 jobs, up from

January's 129,000, coincided with a rise in the unemployment rate to 6.7

percent

from a five-year low of 6.6 percent. The rate rose because more

people began seeking jobs but some didn't find them. That's

still an encouraging sign: More job hunters suggest that people

grew more optimistic about their prospects.

Friday's figures from the Labor Department were a welcome surprise after recent reports showed that harsh weather had closed

factories, lowered auto sales and slowed home sales. Along with an increase in wages last month, the report suggests that

some employers are confident that consumer spending will pick up in coming months.

"If the economy managed to generate 175,000 new jobs in a month when the weather was so severe, once the weather returns to

seasonal norms ... employment growth is likely to accelerate further," Paul Dales, an economist at Capital Economics, said

in a note to clients.

Investors welcomed the news, pushing up the Dow Jones industrial average about 44 points in late-morning trading.

The severe winter had less effect on hiring than most economists had feared. Construction companies, which usually stop work

in bad weather, added 15,000 jobs.

Manufacturing gained 6,000 for a second straight month. Government added 13,000 jobs, the most in six months. Shipping and

warehousing companies and retailers cut jobs.

Still, the monthly average of 129,000 jobs

that employers have added from December through February marks the

weakest three-month

stretch since mid-2012. It's down from a 225,000 average for the

previous three months.

The report presents "a picture of a grinding but positive recovery in the economy," said Stephen Wood, chief market strategist

at Russell Investments.

The government revised up its estimate of job gains for December and January by a combined 25,000. December's gain was revised

up from 75,000 to 84,000, January's from 113,000 to 129,000.

Average hourly pay rose 9 cents in February to $24.31, the biggest gain since June. Hourly wages have risen 2.2 percent over

the past 12 months, ahead of 1.6 percent inflation over that time.

Friday's report makes it likely that the

Federal Reserve will continue reducing its monthly bond purchases at its

next meeting

March 18-19. The Fed is buying Treasury and mortgage bonds to try

to keep long-term loan rates low to spur growth. Fed policymakers

have reduced their monthly bond purchases by $10 billion at each

of their past two meetings to $65 billion.

Though harsh winter weather didn't appear to slow hiring much, the number of Americans who said weather forced them to work

part time in February rather than full time reached the highest level in the 36 years that the government has tracked the

figure. Hours worked fell.

Some recent reports hint that the economy

will accelerate as the weather warms. The number of people who applied

for unemployment

benefits fell last week and is at about the same level as before

the Great Recession.

Applications for unemployment benefits

essentially reflect layoffs. The decline suggests that companies are

confident about

future growth, because layoffs would rise if employers expected

business to weaken. Instead, companies advertised more jobs

online last month, according to the Conference Board. Online job

ads rose 268,100 in February to 5.19 million.

Still, other factors are weighing on the

economy. Auto makers and other manufacturers built up big stockpiles of

goods in

the second half of last year. That means they are likely producing

fewer goods this year and is probably one reason factory

orders are down.

Most economists forecast the economy will

grow at a 2 percent annual pace or less in the first three months of the

year, down

from a 2.4 percent pace in the final three months of 2013. But

they expect growth to accelerate in the spring and summer to

roughly a 3 percent annual pace.