U.S. Adds 175,000 Jobs; Unemployment Ticks Up to 6.7%

Revisions Bolster Picture of Hiring in December and January; Fed Bond-Buying Cuts Likely on Course.

Job growth picked up in February as many employers shrugged off snowstorms and bitter cold across much of the U.S., suggesting resilience in the labor market that should allow the Federal Reserve to continue rolling back its bond-buying program.

Nonfarm payrolls rose by a seasonally adjusted 175,000 in February, the Labor Department said Friday, marking a partial rebound from a stretch of particularly sluggish job growth. Revisions also showed the economy added slightly more jobs in recent months than previously estimated. Payroll employment rose by 129,000 jobs in January, revised up from 113,000, and 84,000 in December, up from the earlier estimate of 75,000.

The nation’s unemployment rate ticked up to 6.7% in February from 6.6% in January. The U.S. labor force grew as people joined the workforce, but so did the number of unemployed.

Friday’s report “gave hints of spring,” BNP Paribas chief North American economist Julia Coronado wrote in a note to clients. “Overall we see the report as normalization back toward a moderate trend in the labor market.”

Economists surveyed by Dow Jones Newswires had projected payrolls would rise 152,000 in February and the unemployment rate would fall to 6.5%.

While the report eased fears about a deeper pullback in hiring, job growth remains relatively sluggish and broader measures of unemployment remain historically high. Payroll growth over the last three months has averaged 129,000 jobs a month, far less than the monthly average of 189,000 over the 12 months ended January.

Friday’s jobs report was “good enough to keep the Fed tapering,” Pantheon Macroeconomics chief economist Ian Shepherdson said in a note to clients. The central bank’s policy-making committee is scheduled to meet March 18-19. Federal Reserve Bank of New York President William Dudley said Thursday that “the threshold is pretty high” for changing course.

The number of Americans who have been out of work for 27 weeks or longer rose in February by 203,000 to 3.8 million. Federal funding for extended unemployment benefits expired at the end of December, a development that could push many of the long-term unemployed either to take jobs or drop out of the workforce entirely.

But the labor-force participation rate held steady last month at 63%, near historic lows. The ranks of the unemployed grew by 223,000, but 264,000 people joined the workforce.

More From The Wall Street Journal (subscription required):