Payrolls Increased in Majority of U.S. States in February

Payrolls increased in 33 U.S. states in February and the unemployment rate fell in 29, a sign the labor market is making progress across much of the country.

California led the nation with a 58,800 gain in employment last month, followed by Texas with a 37,600 increase, Labor Department figures showed today in Washington.

The improvement indicates the economy is overcoming harsh winter weather, which slowed construction and kept some shoppers from stores such as Brown Shoe Co. Inc. Bigger job gains could help boost consumer confidence and household spending, which accounts for almost 70 percent of the economy.

“We are pretty optimistic about the labor market, just like we’re optimistic about the economy in general,” Tom Simons, an economist at Jefferies LLC in New York, said before the report. “Economic activity slowed during the beginning of the quarter, but it hasn’t been so dreadful as to expect that hiring is really going to fundamentally shift lower.”

Unemployment decreased the most in South Caroline last month, dropping to 5.7 percent, the lowest since April 2008, from 6.4 percent in January. The jobless rate in Ohio declined by 0.4 percentage point to 6.5 percent.

Rhode Island was the state with the highest jobless rate in the country in February, at 9 percent. North Dakota had the lowest, at 2.6 percent.

Payroll Decreases

States showing the biggest declines in employment last month included North Carolina, where payrolls dropped by 11,300, and Wisconsin, with a decrease of 9,500.

The economy added 175,000 workers in February, nationwide figures showed this month. The U.S. unemployment rate ticked up to 6.7 percent after dropping to a more-than five-year low of 6.6 percent in January.

State and local employment data are derived independently from the national statistics, which are typically released on the first Friday of every month. The state figures are subject to larger sampling errors because they come from smaller surveys, thus making the national figures more reliable, according to the government’s Bureau of Labor Statistics.

This month’s data may have been impacted by weather, which could have held people back from job searching and caused a slowdown in business activity. February ended with its coldest final week since 2003, according to Berwyn, Pennsylvania-based weather data provider Planalytics Inc. The second week of the month was the snowiest such period since 2007.

Fed Outlook

Labor-market strength has implications for the Federal Reserve’s asset-buying program, which it trimmed to $55 billion this month from a prior buying pace of $65 billion per month.

It also is a central concern for companies including Mooresville, North Carolina-based Lowe’s Cos Inc., which is seeing its business boosted by a housing market recovery paired with job growth.

Gains in employment, rising incomes and home values “help support a healthy home improvement industry that we see out there,” Chief Executive Officer Robert Niblock said in a March 13 conference call.

Other companies, such as St. Louis-based Brown Shoe Co. Inc., have seen consumer demand hurt by weather and have a tempered their outlook as a result.

“The first quarter has already been rough in terms of weather-related store closures and spring sales continued to be delayed,” said Russell Hammer, chief financial officer, speaking in a March 14 call. “While we expect, we’d be able to make up some of these sales in the second quarter, we could see this year’s first quarter earnings at or below last year’s level.”

To contact the reporter on this story: Jeanna Smialek in Washington at jsmialek1@bloomberg.net

To contact the editor responsible for this story: Carlos Torres at ctorres2@bloomberg.net

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