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US Jobless Rate Tumbles To 5.5% In February

US Jobless Rate Tumbles To 5.5% In February

The US jobless rate plunged last month as hiring accelerated, raising expectations of a possible interest rate rise by the Federal Reserve.

The world's biggest economy created 295,000 net new jobs in February, despite some severe weather disruption and mounting layoffs in the oil industry because of recent price weaknesses, the Labour Department reported.

The unemployment rate was down to 5.5% from 5.7% in January - its lowest since May 2008.

The data meant that 3.3 million more Americans have taken jobs over the past 12 months.

Separate Commerce Department data also contained good news with the US trade deficit falling to $41.8bn in January as imports declined more than exports.

Financial markets expect the Fed to raise rates this summer and the payroll report will have done little to dampen that forecast.

The dollar, which is at 12-year highs against the euro, gained further ground though stocks barely moved amid the frenzy over rate rise speculation.

However, wage growth - a key metric eyed by the Fed - among the workers of private firms was just 0.1% last month.

It may be that Fed chair Janet Yellen would want to see a stronger rally in salaries before imposing increases in borrowing costs.

The report showed average hourly wages rose just three cents from January - 2% up on a year ago.

Hiring was strong in restaurants, health care and administrative services.

The oil and gas industry, just beginning to cut back in the face of the crash of crude prices, shed about 8,500 jobs.