Employers added more workers in February than projected but wages unexpectedly declined, dashing hopes that reduced slack in the labor market was starting to benefit all Americans.

The 242,000 gain followed a 172,000 rise in January that was larger than previously estimated, a Labor Department report showed Friday. The jobless rate held at 4.9 percent as people entered the labor force and found work. Average hourly earnings dropped, the first monthly decline in more than a year, and workers put in fewer hours.

A job market in good health will reinforce job security and encourage Americans to spend, buffering the U.S. from the ill-effects of global economic weakness. At the same time, stronger wage growth, which will play a role in deciding the race for the White House, would help move inflation closer to the Federal Reserve’s goal.

“It indicates the resilience of the economy,” said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York. “The labor market doesn’t appear to be hurt by financial market volatility. Wages were a bit disappointing.”

The median forecast in a Bloomberg survey called for a 195,000 advance. Estimates of 92 economists ranged from gains of 70,000 to 245,000. January was initially reported as a 151,000 increase. Revisions to prior reports added a total of 30,000 jobs to payrolls in the previous two months.

The unemployment rate, which is derived from a separate Labor Department survey of households, showed that the labor force expanded by more than a half million people and almost all found work. Joblessness was projected to hold at 4.9 percent, an eight-year low, according to the survey median.

The Election

The labor market is coming off its best two years for job growth since 1998-1999. While leading Democratic presidential candidate Hillary Clinton can point to economic progress under her party’s leadership, Republican front-runner Donald Trump may steer voters to focus on limited wage growth and companies moving operations overseas because of high corporate tax rates.

David Fuller's view

The US economy is gradually improving, led by technology and lower gas prices which are a byproduct of technological innovation.  There is also a gradual improvement in depressed commodity prices and this has lessened deflationary recession fears. 

Due to the accelerating rate of technological innovation, wages are very unlikely to surge over the medium to longer term, with the exception of highly specialist positions, often in IT, or the management of successful corporations.  Additionally, blue collar wages will be held down by the influx of immigrants seeking employment in developed economies such as the USA, Germany or United Kingdom.