Analysts say good news from the US means a recovery is under way, with growth in jobs for the 29th consecutive month
The gap in fortunes between Europe and the United States widened on Friday after the unemployment rate in the US tumbled while Italy suffered the humiliation of another downgrade in its credit status.
Beating the expectations of most analysts, the US economy added 236,000 new jobs in February as the unemployment rate edged down to 7.7%, its lowest level since December 2008. The figures look set to drive US stock markets to record highs.
Italy was downgraded by ratings agency Fitch, amid continuing uncertainty over whether its squabbling politicians will be able to form a government after last month's inconclusive election.
Germany added to the eurozone's woes after a survey showed production stagnated in February. In the UK official figures showed construction output dived in January by more than first thought.
Several analysts have argued that a spate of good news from the US means a sustained recovery is under way. It was the 29th consecutive month that the US added jobs. On average, 183,000 jobs were added each month in 2012. In the past three months, that pace has picked up to an average of about 195,000 a month.
The Obama administration said the figures showed that the economy was strengthening. "While more work remains to be done, today's employment report provides evidence that the recovery that began in mid-2009 is gaining traction," said Alan Krueger, chairman of the Council of Economic advisers. But he cautioned that the reference period for the surveys was before sequester budget cuts began.
"The administration continues to urge Congress to move toward a sustainable federal budget in a responsible way; one that balances tax-loophole closing, entitlement reform and sensible spending cuts, while making critical investments in the economy that promote growth and job creation – and protecting our most vulnerable citizens," Krueger said.
The Bureau of Labor Statistics said the job gains were made in professional and business services, construction, and healthcare. In a sign of the improving housing market, the construction industry added 48,000 in February. Since September, construction employment has risen by 151,000.
There are still unresolved issues in the job market, however. The number of long-term unemployed – those jobless for 27 weeks or more – was unchanged in February at 4.8 million. These accounted for 40.2% of the unemployed. The unemployment rates for teenagers (25.1%), black people (13.8%), and Hispanics (9.6%) remained high and showed little or no change.
The number of people not in the labour force rose to 90.1 million in February, up from 89.9 million in January and 88.3 million in February 2012.
Mark Zandi, the chief economist of Moody's Analytics, said: "The job market remains sturdy in the face of significant fiscal headwinds. Businesses are adding to payrolls more strongly at the start of 2013 with gains across all industries and business sizes. Tax increases and government spending cuts don't appear to be affecting the job market."
The jobs figures and better than expected figures from the service sector helped drive up US stock markets this week. On Tuesday, the Dow Jones industrial average passed levels unseen since before the financial crisis.
In the UK, the stock market shrugged off poor construction figures to reach 6,483, up 44 points. The Office for National Statistics said output fell by 6.3% month on month having fallen by 16.3% in December from November. Worryingly for the chancellor, George Osborne, the figures revealed a sharp fall in infrastructure and civil engineering projects.
Alan Clarke, chief UK economist at Scotia Bank, warned that a triple dip recession was back on the cards without a major boost from other areas of the economy.
The German Dax and French Cac also nudged ahead as large firms, like their UK counterparts, looked ahead to better exports on the back of better news from the US. The US remains the world's largest economy and an important market for European goods.
Even the Italian stock market bounced after the non-farm payroll results, shaking off a credit downgrade that kept the country a few notches above junk status.
Fitch, which downgraded Italy's bond rating to BBB+, from A- with a negative outlook, said: "The increased political uncertainty and non-conducive backdrop for further structural reform measures constitute a further adverse shock to the real economy amidst the deep recession."
The agency expects Italy's output will shrink by 1.8% this year, as Europe's fourth-largest economy struggles in the throes of deepening recession. Reported by guardian.co.uk 4 hours ago.
The gap in fortunes between Europe and the United States widened on Friday after the unemployment rate in the US tumbled while Italy suffered the humiliation of another downgrade in its credit status.
Beating the expectations of most analysts, the US economy added 236,000 new jobs in February as the unemployment rate edged down to 7.7%, its lowest level since December 2008. The figures look set to drive US stock markets to record highs.
Italy was downgraded by ratings agency Fitch, amid continuing uncertainty over whether its squabbling politicians will be able to form a government after last month's inconclusive election.
Germany added to the eurozone's woes after a survey showed production stagnated in February. In the UK official figures showed construction output dived in January by more than first thought.
Several analysts have argued that a spate of good news from the US means a sustained recovery is under way. It was the 29th consecutive month that the US added jobs. On average, 183,000 jobs were added each month in 2012. In the past three months, that pace has picked up to an average of about 195,000 a month.
The Obama administration said the figures showed that the economy was strengthening. "While more work remains to be done, today's employment report provides evidence that the recovery that began in mid-2009 is gaining traction," said Alan Krueger, chairman of the Council of Economic advisers. But he cautioned that the reference period for the surveys was before sequester budget cuts began.
"The administration continues to urge Congress to move toward a sustainable federal budget in a responsible way; one that balances tax-loophole closing, entitlement reform and sensible spending cuts, while making critical investments in the economy that promote growth and job creation – and protecting our most vulnerable citizens," Krueger said.
The Bureau of Labor Statistics said the job gains were made in professional and business services, construction, and healthcare. In a sign of the improving housing market, the construction industry added 48,000 in February. Since September, construction employment has risen by 151,000.
There are still unresolved issues in the job market, however. The number of long-term unemployed – those jobless for 27 weeks or more – was unchanged in February at 4.8 million. These accounted for 40.2% of the unemployed. The unemployment rates for teenagers (25.1%), black people (13.8%), and Hispanics (9.6%) remained high and showed little or no change.
The number of people not in the labour force rose to 90.1 million in February, up from 89.9 million in January and 88.3 million in February 2012.
Mark Zandi, the chief economist of Moody's Analytics, said: "The job market remains sturdy in the face of significant fiscal headwinds. Businesses are adding to payrolls more strongly at the start of 2013 with gains across all industries and business sizes. Tax increases and government spending cuts don't appear to be affecting the job market."
The jobs figures and better than expected figures from the service sector helped drive up US stock markets this week. On Tuesday, the Dow Jones industrial average passed levels unseen since before the financial crisis.
In the UK, the stock market shrugged off poor construction figures to reach 6,483, up 44 points. The Office for National Statistics said output fell by 6.3% month on month having fallen by 16.3% in December from November. Worryingly for the chancellor, George Osborne, the figures revealed a sharp fall in infrastructure and civil engineering projects.
Alan Clarke, chief UK economist at Scotia Bank, warned that a triple dip recession was back on the cards without a major boost from other areas of the economy.
The German Dax and French Cac also nudged ahead as large firms, like their UK counterparts, looked ahead to better exports on the back of better news from the US. The US remains the world's largest economy and an important market for European goods.
Even the Italian stock market bounced after the non-farm payroll results, shaking off a credit downgrade that kept the country a few notches above junk status.
Fitch, which downgraded Italy's bond rating to BBB+, from A- with a negative outlook, said: "The increased political uncertainty and non-conducive backdrop for further structural reform measures constitute a further adverse shock to the real economy amidst the deep recession."
The agency expects Italy's output will shrink by 1.8% this year, as Europe's fourth-largest economy struggles in the throes of deepening recession. Reported by guardian.co.uk 4 hours ago.