The U.S. economy experienced strong jobs growth in February, in fact the best since July 2016. Also, the unemployment rate declined, reflecting tighter labor market conditions. Moreover, steady gains in employment pushed workers pay higher, with average hourly wages increasing last month. A better-than-expected jobs report indicated a rosier economy and cemented a rate hike in the Fed’s upcoming two-day policy meeting ending Mar 15.

Construction, manufacturing and healthcare companies led the way for job creation. In this context, we have focused on those mutual funds that have significant exposure to these three sectors. But before that, let’s take a peek into the data.

Nonfarm Payrolls Post Gains in February

According to the U.S. Bureau of Labor Statistics, domestic non-farm payrolls increased by 235,000 last month, registering its best job growth since July 2016. It was also significantly higher than the consensus estimate of 191,000 job additions. Moreover, a sharp upward revision of January’s job number indicated strong additions this year. Moreover, the unemployment rate declined from 4.8% in January to 4.7% in February. However, the labor participation rate rose from 62.9% in January to 63%.

Also, average hourly earnings rose by 6 cents to $26.09 last month, up 2.8% for the year. Average hourly earnings in manufacturing rose by 26 cents. Some other industries like information, financial activities, and education and health services increased 9 cents, 15 cents and 7 cents, respectively.

Sectors That Led to Job Gains

Construction Services

Construction employment increased by 58,000 last month, following strong job growth in civil and heavy engineering construction, and specialty trade contractors. This particular sector marked the biggest monthly rise since the recovery that began in mid-2009 and created around 177,000 jobs in the last six months.

Manufacturing Services

Employment in the sector created 28,000 jobs in February,the highest addition since August 2013.The sector also added 57,000 to the number of employed in the last three months. Food manufacturing services created 9,000 jobs, while machinery services saw around 7,000 additions. A strong rise in these two sectors helped the industry see gains in nonfarm payrolls for February.