Jobless Rate Unexpectedly Dips to 5.5%

The U.S. economy added jobs in February for the first time since July, pushing the unemployment rate down to 5.5% from 5.6% in January, the Labor Department reported Friday. This immediately fueled speculation that the recovery is moving faster than first thought.

Since employment levels drive so much economic activity, an improvement in the job market can bolster consumer confidence and spending patterns, which affect trucking demand.

Total payrolls increased by 66,000 last month after dropping by 126,000 in January and 106,000 in December. It was the largest payroll increase since February 2001. Payroll losses have averaged 146,000 per month since the recession began in March 2001, Labor said.

Nearly every sector added some jobs except for manufacturing, which lost another 50,000. Still, that was about half the average pace of the previous 12 months and the smallest drop since December 2000.

Despite recent positive economic data and upbeat comments from Federal Reserve Chairman Alan Greenspan, analysts told Bloomberg they were expected the jobless rate to rise to 5.8% because joblessness usually keeps rising at that start of a recovery.

During February, transportation and public utilities companies added 4,000 jobs, construction added 25,000 jobs and retailers increased payrolls by 58,000.

Workers' average hourly earnings rose 0.1%, or 2 cents, in February, Labor said.

This report comes less than two weeks before Fed policy makers meet to decide whether to change interest rates. Many analysts now believe the Fed will declare the risks to the economy are now equally balanced between inflation and weak growth, the Associated Press said.

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