The US economy added a modest 97,000 jobs in February, the smallest gain in two years, the government said today.
However, job growth in prior months was stronger than first thought and the unemployment rate dropped.
Adding to a picture of economic resilience, the US trade deficit narrowed slightly more than expected in January to $59.1 billion as US exports hit a record high, a separate report showed.
The Labor Department's payrolls report showed substantial revisions to employment in January and December boosted payrolls by 55,000 more jobs than previously reported.
Also, the unemployment rate edged down to 4.5 per cent from 4.6 per cent, helping allay mounting concern that softening was spreading beyond the struggling manufacturing and housing sectors.
US Treasury debt prices and Fed funds rate futures fell, trimming chances of rate cuts, after the reports. The dollar and US stock index futures rose after the data.
Analysts were expecting the economy to add 100,000 jobs outside of the farming sector in February and for the jobless rate to hold steady at 4.6 per cent.
February's payrolls rise was nevertheless the smallest monthly rise since a gain of 95,000 in January 2005, the Labor Department said. However, it revised job gains up to 146,000 in January and to 226,000 in December.
Construction employment fell 62,000 in February, probably prompted by cold and stormy weather in much of the country. The weather effect suggests job gains will pick up when balmy weather returns. Manufacturing employment shed 14,000 positions.
Health care, which accounted for one in six jobs added to US payrolls in the last 12 months, added 33,000 jobs in February.
Average hourly earnings rose by 6 cents, or 0.4 per cent, in February. Analysts were expecting earnings to rise by 0.3 per cent.
A separate report from the Commerce Department showed a narrowing of the trade gap after it set an annual record for the fifth straight year in 2006.