Paul Davidson

USA TODAY

Employers added 242,000 jobs in February as the labor market bounced back from a short-lived slowdown and provided further evidence that it’s shrugging off global economic troubles and market turbulence.

The unemployment rate, which is calculated from a different survey, was unchanged at 4.9%, the Labor Department said Friday. A sharp rise in employment was offset by a similar-sized increase in the labor force, which includes those working and looking for jobs..

Economists surveyed by Bloomberg expected 195,000 job gains, according to their median forecast.

Also encouraging is that job gains for December and January were revised up by a total 30,000.December’s was revised to 271,000 from 262,000, and January’s, to 172,000 from 151,000.

The report drove up the Dow Jones industrial average by about 83 points in mid-day trading, lifting it to more than 17,000 for the first time since early January. Although it raises the odds of a Fed rate hike as soon as April, investors appeared more encouraged by the good economic news than worried about a rate increase, which isn't expected at a March 15-16 meeting.

But average hourly wages fell 3 cents to $25.35 after rising sharply in January, and are up 2.2% the past year, raising concerns that a recent pickup to 2.5% is not being sustained. The Federal Reserve is seeking signs that tepid wage gains of just over 2% for most of the recovery are accelerating. That would help push meager inflation towards the Fed’s annual 2% target.

Also of some concern is that the average workweek fell to 34.4 hours from 34.6 hours. And the number of temporary workers dropped by 10,000 and was down for the second straight month. Those could be signs that hiring may slow in coming months since employers typically adjust the hours of existing workers and bring on or lay off temporary employees before adding permanent staffers.

Businesses added 230,000 jobs, led by health care, retail and restaurants. Federal, state and local governments added 12,000.

In another positive sign, a broader measure of joblessness that includes part-time employees who prefer full-time jobs and discouraged workers who have given up looking, as well as the unemployed, fell to 9.7% from 9.9%.

The labor market continues to turn in a much stronger performance than the nation’s gross domestic product, or the economy’s total output, which ticked up just 1% in the fourth quarter and is expected to rise slightly more than 2% in the current quarter. Many analysts believe employment provides a more accurate gauge of the economy than GDP, which can be tough to measure and is subject to multiple revisions.

“The labor market is a better measure because businesses would not be hiring if they didn’t have the need to hire and they weren’t seeing the demand,” says Joel Naroff of Naroff Economic Advisors.

Despite the strong report, most economists don’t expect the Federal Reserve to raise its key interest rate this month after lifting it in December for the first time in nine years. The overseas strains and oil crash have shaken financial markets, and Fed policymakers have said they want to assess those effects on the economy. Stocks have rallied from a sell-off earlier in the year, but corporate borrowing costs remain elevated compared to last year, reflecting lingering jitters about the economy.

Last month, health care added 57,000 jobs; retail, 55,000; restaurants and bars, 40,000. Construction added 19,000 jobs amid a strengthening housing recovery.

But manufacturers cut 16,000 jobs as weakness overseas and a strong dollar continued to curtail their exports, and the plunge in oil prices discourages energy investment. Mining and logging companies, which includes oil producers chopped another 18,000 jobs.

Although payroll growth had slowed in January, economists largely blamed payback for blockbuster average gains of 279,000 in the fourth quarter that were likely inflated by unseasonably warm weather.

A second straight disappointing performance in February would have stoked worries that manufacturers’ struggles were finally restraining the healthy service sector and labor market. Weakness abroad, especially in China, and a strong dollar have clobbered factory exports while low oil prices have dampened energy investment and related production.

This week, an index of February service-sector activity revealed continued growth but its measure of employment fell into contraction territory.

At the same time, payroll processor ADP reported a solid gain of 214,000 private-sector jobs last month. Initial jobless claims, a reliable barometer of layoffs, have remained at low levels. And recent reports showed strong advances in household consumption and construction spending. Even an index of manufacturing activity posted a less severe contraction.

Follow Paul Davidson on Twitter @PDavidsonusat.