By Vicki Needham - 03/06/15 08:46 AM EST
Employers added a better-than-expected 295,000 jobs in February as the unemployment rate edged down to 5.5 percent, the lowest level in nearly seven years, according to new numbers out Friday.
Unemployment hit a high of 10 percent in October 2009, and the current level is the lowest since May 2008 after falling from 5.7 percent in January.
December’s figures remained unchanged at 329,000 while January’s revised numbers showed a drop of 18,000 to 239,000.
Jobs growth averaged 288,000 over the past three months.
The economy added more than 3 million jobs last year and was on a torrid pace through the final three months, tacking on nearly 1 million jobs.
Wage growth grew by 0.1 percent last month and is only up 2 percent over the past year.
Economists are expecting the economy to grow at about a 3 percent rate this year — even though the expansion slowed in the past few months.
But economists expect to see stronger growth as the labor market tightens over the next year.
The economy has added 200,000 jobs a month for the past 12, the best streak since the mid-1990s.
Jason FurmanJason FurmanOvernight Finance: Trump threatens NAFTA withdrawal | Senate poised for crucial Puerto Rico vote | Ryan calls for UK trade deal | Senate Dems block Zika funding deal US economy grew at slightly faster 1.1 percent pace in Q1 Overnight Finance: Wall Street awaits Brexit result | Clinton touts biz support | New threat to Puerto Rico bill? | Dodd, Frank hit back MORE, chairman of the Council of Economic Advisers, said the private sector also topped 200,000 jobs a month for the past year — the first time that has happened since 1977.
While Furman acknowledged the labor market's continuing improvement he noted that "we’re not all the way there yet."
Republicans said the administration needed to do more to help middle class families.
“While it is welcome news that more Americans found work last month, middle-class families continue to be left behind by the president's policies,” said Speaker John BoehnerJohn BoehnerEXCLUSIVE: Pro-Hillary group takes 0K in banned donations Ryan: Benghazi report shows administration's failures Clinton can't escape Benghazi responsibility MORE (R-Ohio).
“Republicans remain focused on solutions that will help grow the economy and support more jobs and better wages for all Americans."
House Ways and Means Committee Chairman Paul RyanPaul RyanHouse to vote on NRA-backed gun measure Congress fails on promises to restore regular order and stop funding by crisis The only common ground between Donald Trump and Paul Ryan is an "R" MORE (R-Wis.) said “too many families are still struggling to get by” while touting the need for improved trade policy and an overhaul of the tax code.
“We’re moving full steam ahead on real reforms that will create more opportunity in this country, like expanding American trade and fixing our broken tax code,” Ryan said.
Meanwhile, Senate Minority Leader Harry ReidHarry ReidOvernight Finance: Obama signs Puerto Rico bill | Trump steps up attacks on trade | Dodd-Frank backers cheer 'too big to fail' decision | New pressure to fill Ex-Im board Iowa poll: Clinton up 14 on Trump, Grassley in tight race with Dem Lynch meeting with Bill Clinton creates firestorm for email case MORE (D-Nev.) said the report reflects the nation’s improving economy.
“It should now be the mission of this Congress to build upon America’s strengthening economy and achieve results for middle class Nevadans and all Americans,” he said. “However, Republicans in Congress continue to ignore the needs of struggling workers."
The jobless rate was affected by both a hiring increase — 96,000 more people reported having jobs last month — and a drop of 178,000 people in the labor force.
Construction added 29,000 jobs in February, a sign that bad weather didn’t affect the report too much, while manufacturing added 8,000 jobs.
Higher-paying jobs also got a boost with professional and business services adding 51,000 jobs and financial services adding another 10,000.
A separate report on Wednesday showed that unemployment fell in every state — the first time that has happened since 1984, the Labor Department reported.
An ADP employment report on Wednesday showed that private-sector employers added 212,000 jobs in February, a slow down likely reflecting a spate of severe winter weather.
Mark Zandi, chief economist with Moody’s Analytics, said the labor market’s underlying trend is for growth of about 250,000 jobs a month, keeping the economy on track for another 3 million jobs this year.
The economy is expected to return to normal employment by mid-2016, he said.
"It takes a lot to derail the momentum that currently exists in the labor market," he added.
This post was updated at 11:30 a.m.