U.S. Added 227K Jobs Last Month--So Why's The Market Muted?

The United States added 227,000 jobs last month, the latest signal that the job market is slowly recovering. The unemployment rate remained at 8.3%, according to the Labor Department’s monthly report.

Hiring came across all sectors and pay scales. The higher paying professional services industry added 82,000 jobs. Manufacturing added 31,000 jobs. This widespread hiring suggests an increasingly sustainable recovery.

The job growth beat economists’ forecast for February, which called for around 213,000 new jobs. And job creation data was revised up for both December and January, from 203,00 to 223,00 and 243,000 to 284,000 respectively.

The average workweek was unchanged at 34.5 hours, another key indication of an improving employment situation. Meanwhile, labor force participation slightly rose in February, by 0.2%, and the number of Americans marginally attached to the economy fell again, also by 0.2%.

America’s unemployment rate now hovers at a February 2009 level and has fallen for six consecutive months. Economists believe the unemployment rate should fall to 8% by the end of the year. Job creation and a low unemployment rate are often cited as the most important signals of economic recovery.

�One month can be a fluke. Two months can be lucky. Now at three months and more, it�s trend,� says Mark Zandi, Moody�s Analytics chief U.S. economist. �Unless we get derailed by some geopolitical event, the job market and labor market will gain traction. Broadly speaking, the economy is engaging and evolving into a self-sustaining state.�

So, shouldn�t the market be off to the races this morning?

Equities have advanced, but the reaction has mostly stayed muted. The Dow Jones Industrial Average gained 0.1% to 12,922.17. Both the Nasdaq composite and the S&P 500 index increased about 0.4%, to 2,981.50 and 1,371.34 respectively.

In the third straight day of a steady rally, consumer cyclical stock! s are le ading the gains. Nike shares rose 1.49% to $109.51. Sony is up nearly 4% at $21.23. Leather-goods designer Coach remains at all-time highs, trading up 0.6% at $77.21.

Apple, now a considered a bellwether stock, has also seen a slight uptick, increasing 0.6% to $545.33.