Job creation in the United States fell far short of expectations in February, as only 21,000 new positions were added when up to 130,000 new jobs had been forecast by economists.

The U.S. unemployment rate remained unchanged from January at 5.6% as roughly 392,000 civilians quit looking for work last month. Roughly 8.2 million Americans were out of work last month.

Additionally, a preliminary estimate of 112,000 jobs created in January was revised downward to 97,000.

Manufacturers lost jobs for the 43rd month in a row in February. Factories cut 3,000 positions last month, but that marked a slower pace than the 13,000 cut in January.

Construction companies lost 24,000 jobs in February as bad winter weather in some parts of the country delayed projects. Leisure and hospitality firms cut 9,000 jobs in February.

Retailers, however, added 13,000 positions in February. Temporary help firms added 32,000 and education and health-care services gained 13,000 jobs last month.

BMO Nesbitt Burns’ chief economist Sherry Cooper concedes that this marks the fourth month in a row when the economists’ consensus for payrolls was much too optimistic. “There is no need to dig deeply into these very disappointing figures. If the labour market has a pulse, it is barely detectable,” Cooper says.

CIBC World Markets says that job losses in manufacturing seem to have abated, but now services, particularly retailing, are weak. “Although we’re not the most bullish on job growth ahead, we’re surprised at how soft these figures remain given the trend improvement in jobless claims.”

“Today’s results are frankly puzzling. The U.S. economy is growing at a very rapid pace, and other activity indicators point to improving labour market conditions, but the evidence just isn’t showing up in the all-important monthly payrolls report,” TD Bank says.”

“The ongoing failure of the U.S. economy to generate any meaningful job growth will fuel concern about the sustainability of the recovery and is sure to keep the labour market on the front burner in this year’s presidential campaign,” TD says.

Nesbitt’s Cooper says that the latest report is certainly bad news for the Bush Administration, “as John Kerry will no doubt hammer home the disappointment, repeating everywhere that George W. Bush is the first President since Herbert Hoover and the Great Depression to preside over a net job loss (of 2.3 million jobs). This also postpones the timing of any Fed tightening, as evidenced by the enormous rally in bonds. U.S. ten-year yields have fallen to their lowest level in 8 months, currently just over 3.86%.”