Posted on 04 Mar 2011
The Labor Department reported on Friday that the nation’s employers added 192,000 jobs in February, up from a gain of 63,000 the previous month.
February’s number did represent the fastest growth in nearly a year, however this was in part due to the bounce back from unusually depressed hiring in January, when major snowstorms shuttered offices and factories around the country. Taken together, the job growth for the first two months of 2011 has not been much better than it was last fall.
Economists still say they are hopeful that the pace will soon pick up, assuming higher global energy and food prices do not derail the recovery.
“Economic recoveries can be like a snowball rolling down a hill, in that it takes time to get some momentum,” said John Ryding, chief economist at RDQ Economics. “People hesitate until they feel that the recovery’s durable enough, and then they have a tendency to jump in. Maybe we’re finally getting to that jumping-in moment.”
The unemployment rate ticked down to 8.9 percent, falling below 9 percent for the first time in nearly two years. This rate, which comes from a separate survey and is based on the total number of Americans who want to work, has remained stubbornly high in the last year despite payroll growth. Altogether, 13.7 million people are still out of work and actively looking.
Economists say the unemployment rate may rise temporarily in the next few months, as stronger job growth lures some discouraged workers back into the labor force. Right now the share of working-age population that is actively involved in the work force — that is, either in a job or actively looking for one — is at 64.2 percent. That is the lowest labor force participation rate in 25 years, an indication that many Americans are waiting for hiring to get better before resuming the job hunt.
“It’s a puzzle, a genuine puzzle why that number has been stuck,” a senior economist at Credit Suisse, Jay Feldman, said. “I expect it to recover somewhat in the coming months as the labor market improves and more people become encouraged about their job prospects.”
Other recent economic reports — like those on unemployment insurance claims and manufacturing employment — have pointed to stronger demand for workers. The Federal Reserve, in a survey of its 12 districts, noted on Wednesday that the labor market had improved modestly, but the Fed chairman, Ben S. Bernanke, told lawmakers that “until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established.”
A broader measure of unemployment, which includes people working part-time because they could not find full-time jobs and those so discouraged that they have given up searching, was 15.9 percent in February, down from 16.1 percent in January.
Private sector job gains touched nearly every industry last month. Among the biggest winners were the manufacturing, construction, and professional and business services industries. Construction payrolls had been unusually low in January, when the industry shed jobs, probably because of severe snowstorms.
“In some cases it’s very hard to judge how big the underlying improvement here is in this data,” said Nigel Gault, chief United States economist at IHS Global Insight.
Not every sector added jobs. State and local governments, squeezed by revenue shortfalls and a reluctance to raise taxes, again laid off workers. Local governments have shed 377,000 jobs since September 2008, when their number of employees last peaked.