U.S. employment made steady gains last month while paychecks expanded, showing the jobs market remains resilient amid tepid growth overseas.
The U.S. added a robust 215,000 jobs last month, the Labor Department said Friday, with the number topping estimates of 200,000. The unemployment rate edged up to 5 percent from an eight-year low of 4.9 percent as more Americans returned to the workforce, signaling more optimism about the labor market.
The labor force participation rate, or the portion of the working-age who have a job or are looking for one, climbed a tenth of a percentage point to 63 percent last month, the highest level in two years. It has increased 0.6 percentage point since declining to 62.4 percent in September.
"We continue to create jobs, and that's a good thing. It's more about where we're creating jobs than anything," said JJ Kinahan, chief strategist at TD Ameritrade. "The area where we created the most jobs is retail and restaurants, and those tend to be jobs, not careers."
But Kinahan found the next two strongest categories -- construction and health care -- to be positive factors, offset by the fact that the largest job losses came in manufacturing. "We're not a manufacturing economy, but that's not an area where you want to be losing jobs."
Average hourly earnings rose by 7 cents to $25.43, after a two-cent decline in February.
"The average hourly earnings and the participation rate increases, combined with the 215,000 payroll number, speak to a pretty healthy labor market," Sean Lynch, co-head global equity strategy at Wells Fargo Investment Institute, said. "The unemployment rate starting to tick up shows participation is coming back."
Investors are closing watching the jobs report, since it may influence the pace of interest rate hikes. The Federal Reserve raised a key interest rate last December for the first time in years.
Fed Chair Janet Yellen on Tuesday said sluggish global economic growth and lower energy costs presented a downside risk to U.S. economic outlook and that she thought it prudent that monetary policy "proceed cautiously."
"Any April rate hike was off the table anyway," Kinahan said, while noting that Fed funds show "we go past July until we get to a 50 percent probability."
The Labor Department revised its February report up by 3,000 to 245,000; January was revised down 4,000 to 168,000. Over the last the three months, job growth has averaged 209,000.