US jobs growth stronger than expected

Bar and restaurant companies saw some of the biggest jobs growth

The US economy added 678,000 jobs last month, far ahead of expectations, as activity continued to rebound.

The unemployment rate also edged down to 3.8%, the US Bureau of Labor Statistics reported.

Job growth was widespread, led by gains in leisure and hospitality, professional and business services, health care, and construction.

The number of new jobs added was well above analysts' estimates of about 400,000 new roles.

Companies also added more jobs in January than previously estimated, according to revised numbers released on Friday.

Average hourly earnings rose 5.1% over the past 12 months, although that is down from a 5.7% annual increase in January.

Most of the rise in jobs came from the leisure and hospitality industries, which added 179,000 new roles, and at bar and restaurant companies, which filled 124,000 jobs.

Employment in professional and business services increased by 95,000 jobs in February.

However, the total number of jobs on US payrolls is still 2.1 million below where it was before the Covid-19 pandemic.

Analysts predicted that the stronger-than-expected jobs market increased the certainty that the US central bank will raise interest rates at its next meeting, something US Federal Reserve chairman Jerome Powell said earlier this week that he was in favour of.

"It looks like rates up by 0.25 basis points will be coming this month, as noted by Powell yesterday. The outlook is too uncertain for more than that," said Neil Birrell, chief investment officer at Premier Miton Investors.

Seema Shah, chief strategist at Principal Global Investors, said an interest rate rise in the US was "all but baked in" to help control soaring inflation rates.