WASHINGTON (AP) -- 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 a sharp increase in wages last month, the report suggests that some employers are confident that consumer spending will pick up in coming months.
The severe winter appeared to have 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.
"This suggests we should see solid gains in job growth in coming months," said Michelle Meyer, senior U.S. economist at BofA Merrill Lynch Global Research.
Daniel Alpert, managing partner at Westwood Capital, noted that roughly two-thirds of the job growth in January and February was in higher-paying industries. That's a reversal from all of last year, when about two-thirds were in lower-paying fields.
A category called professional and business services, which includes better-paying jobs such as engineers, accountants and architects, along with some lower-paying jobs such as temporary workers, added 79,000 jobs in February. That was the most in a year.
Retailers, though, lost 4,100 jobs, transportation and warehousing firms 3,600.
Despite February's solid overall gain, 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.
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.
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. That could mean that employers are finally starting to boost pay after several years of stagnant wages.
Economists cautioned that further sustained increases would be needed to signify a broad pickup in pay. Some of the wage increase likely reflects the recent job gains in higher-paying fields.
Though harsh winter weather didn't appear to slow hiring much, more than 6 million Americans said weather forced them to work part time in February rather than full time. That was the highest such level for any February in the 36 years that the government has tracked the figure.
Those workers were counted as employed and didn't distort either the February job gain or unemployment rate. But for many, fewer hours will mean lower pay. That could hold back consumer spending and the economy in the first quarter of the year.
More than a quarter-million people started looking for a job last month, and most of them didn't find one. Their influx caused the unemployment rate to rise.
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.
"We continue to believe the economy will defrost in the spring and heat up in the summer," said Meyer of BofA Merrill Lynch.
AP Economics Writers Josh Boak and Paul Wiseman contributed to this report.
Contact Chris Rugaber on Twitter at http://Twitter.com/ChrisRugaber .
- Budget, Tax & Economy
- Unemployment Issues
- unemployment rate