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Last Updated: Friday, 10 March 2006, 14:42 GMT
US unemployment rate heads higher
Worker at Chrysler factory in Detroit
The US manufacturing sector shrunk last month
The US unemployment rate rose to 4.8% last month, even though the number of new jobs added to the economy increased by 243,000, the Labor Department said.

The rise, from 4.7% in January, came as more people entered the labour market, absorbing the number of new jobs added.

Analysts were surprised as they had expected the rate to remain unchanged.

"A large number of people [are] coming out of the woodwork because there are jobs to be found," said Bill Cheney, economist at John Hancock.

The new jobs came mainly in the retail, financial and construction sectors, while manufacturing jobs were lost, in particular in the automotive industry.

But across the US, six in 10 industries added jobs in February.

The Labor Department figures also showed that average hourly earnings grew by 0.3% last month. In the year to February pay increased by 3.5%, the highest annual rise since September 2001.

"Businesses are apparently seeing strong enough growth in demand for their goods and services to look for more workers - and businesses are being forced to pay up for them because wages are rising strongly, too," said economist Joel Naroff, president of Naroff Economic Advisors.

"The job market is becoming more and more friendly if you are a worker or looking to become one."

In January, 170,000 new jobs were created in the US economy, pushing the unemployment rate to its lowest level in four-and-a-half years.


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