Economy Warms, but Isn't Overheating --- Payrolls Rose, Jobless Rate Eased in Latest Month; Consumer Credit Is Up
WASHINGTON -- The economy continued to sizzle last month, but cast off few sparks indicating overheating.</br></br>The latest evidence of vigor: Payrolls swelled by 339,000 in February, the biggest one-month jump since May, the Labor Department said. The first major official statistical portrait for the month also showed that the unemployment rate slipped 0.1 point to 5.3% -- putting it below 5.5% for the ninth month in a row.</br></br>In a separate report, the Federal Reserve said consumer credit rose at an 8.4% annual rate in January, the biggest jump since August. The rise, which included a sharp boost in credit-card use, seems to confirm recent reports of growing household spending and consumer confidence.</br></br>Financial markets rallied on the employment data. The Dow Jones Industrial Average rose 56.19, or 0.81%, to 7000.89, Friday, while the 30-year Treasury bond rose 26/32 point, pushing the yield down to 6.81%.</br></br>Most economists -- from Fed Chairman Alan Greenspan on down -- believe that the booming economy, especially the strong labor market, will eventually push up wages and then ignite inflation. And with Mr. Greenspan having told Congress earlier in the week that he continues to remain vigilant for any warning signs that might force him to boost interest rates later this month, the markets were examining the tiniest details of Friday's releases for any glimpse of inflation.