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Hat trick for jobs growth in US boosts Obama's election hopes

US employment grew solidly for a third straight month in February, a sign the economic recovery in Ireland's second-largest trading partner is strengthening. The trade surplus widened meanwhile as Americans bought more imports.

Employers added 227,000 jobs to their payrolls last month, the Labor Department said yesterday, while the unemployment rate held at a three-year low of 8.3pc even as people flooded back into the labour market to hunt for jobs.

Not only was job growth a bit stronger than the 210,000 economists polled by Reuters had expected, but the government said 61,000 more jobs were created in December and January than previously thought.

Jobs outside agriculture have now grown by more than 200,000 for three months in a row -- bolstering President Barack Obama's chances of re-election. Employment growth has averaged 245,000 a month over the past three months.

"It looks like the economy is starting the year with some positive news for consumers and households," said Gary Thayer of Wells Fargo. "The trend is toward better jobs data with companies showing more conviction that the economy is finally gaining strength."

Rallied

US stocks opened modestly higher on the report, while prices for US bonds fell as traders dialled down the prospects for more bond buying by the Federal Reserve. The dollar rallied broadly.

"I think we'll begin to ... debate about the Fed exiting its ultra-accommodative policy stance sooner than expected," said Over Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.

A second report yesterday showed the US trade deficit widened 4pc on high oil prices and record imports, which will weigh on domestic growth.

Manufacturing, which in January recorded the largest jobs gain in a year, had another sturdy performance in February and there was also strong demand for temporary help, a potential harbinger of future permanent hiring.

Although the labour market is gaining some momentum, the pace remains too slow to do much to absorb the 23.5 million Americans who are either out of work or underemployed.

Fed chairman Ben Bernanke last week described the jobs market as "far from normal" and said continued improvement would require stronger demand for US goods and services.

Still, he suggested the outlook would have to deteriorate for the US central bank, which meets next week, to launch another round of bond buying to drive interest rates lower.

The US unemployment rate has dropped 0.8 percentage point since August, providing some relief to Mr Obama, who faces an election battle in which the economy has been centre stage.

Irish Independent