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Economy Adds 227,000 Jobs in February

(photo: Brian A Jackson/shutterstock.com)

Another healthy jobs report, according to the Bureau of Labor Statistics. The economy added 227,000 jobs in February, and December (now 223,000) and January (now 284,000) were both revised upward. The pace of job creation over the past three months is on par with the average during the Clinton years.

The unemployment rate, however, remained unchanged at 8.3%. The labor force participation rate ticked up to 63.9%, up 0.2% from January. This is a good sign, as it means the labor market is attractive enough to get people back to look for work. But it means that the topline rate of unemployment requires more job creation to change, because it comes from a bigger pool of workers. The employment-population ratio also rose to 58.6%.

Another good sign in the data is that the public sector job loss is starting to abate somewhat. Private payrolls added 233,000 in February while public payrolls dropped 6,000. This is an improvement in the public sector over previous months; government lost 22,000 jobs a month on average in 2011. Perhaps the tax base has been restored enough in the states that we’ll actually see public-sector gains soon.

Unfortunately, the improving job market has not done a whole lot for the long-term unemployed as of yet. That number remained unchanged in February, at 5.4 million, representing 42.6% of all the unemployed in the survey. And of course, that doesn’t count people who are still out of the labor force. All of the statistics on the long-term unemployed are roughly the same as a year ago. Public policy so far has not helped these millions of individuals, the detritus of the Great Recession.

One of the other issues that must be addressed is the quality of the new work. The largest-growing sector in February was professional and business services, with half of that growth in temporary help, around 45,000. This means that productivity gains have slowed to the point where businesses must hire new workers, but temp work isn’t exactly gratifying or high-paying. Temp work increases are usually a sign of more job growth to come, as those jobs get converted into permanent work. And hourly earnings did go up 3 cents for the month. Other industries showing good growth include health care and leisure and hospitality. Manufacturing went up 31,000, while in a worrying sign, construction jobs were flat.

Overall, this is a healthy jobs report, but here’s some perspective. The Federal Reserve Bank of Atlanta has a nifty jobs calculator where you can plug in numbers and see how long it will take to get to a certain unemployment rate. Assuming the same labor force participation rate, it will take over three straight years of growth like this to get to a normal unemployment rate of 5.5%. And if that labor force participation rate goes up, which is likely in a healthy job market, to say 64.5%, it would take well over four years to get to that same number.

(photo: Brian A Jackson/shutterstock.com)

CommunityThe Bullpen

Economy Adds 227,000 Jobs in February

Another healthy jobs report, according to the Bureau of Labor Statistics. The economy added 227,000 jobs in February, and December (now 223,000) and January (now 284,000) were both revised upward. The pace of job creation over the past three months is on par with the average during the Clinton years.

The unemployment rate, however, remained unchanged at 8.3%. The labor force participation rate ticked up to 63.9%, up 0.2% from January. This is a good sign, as it means the labor market is attractive enough to get people back to look for work. But it means that the topline rate of unemployment requires more job creation to change, because it comes from a bigger pool of workers. The employment-population ratio also rose to 58.6%.

Another good sign in the data is that the public sector job loss is starting to abate somewhat. Private payrolls added 233,000 in February while public payrolls dropped 6,000. This is an improvement in the public sector over previous months; government lost 22,000 jobs a month on average in 2011. Perhaps the tax base has been restored enough in the states that we’ll actually see public-sector gains soon.

Unfortunately, the improving job market has not done a whole lot for the long-term unemployed as of yet. That number remained unchanged in February, at 5.4 million, representing 42.6% of all the unemployed in the survey. And of course, that doesn’t count people who are still out of the labor force. All of the statistics on the long-term unemployed are roughly the same as a year ago. Public policy so far has not helped these millions of individuals, the detritus of the Great Recession.

One of the other issues that must be addressed is the quality of the new work. The largest-growing sector in February was professional and business services, with half of that growth in temporary help, around 45,000. This means that productivity gains have slowed to the point where businesses must hire new workers, but temp work isn’t exactly gratifying or high-paying. Temp work increases are usually a sign of more job growth to come, as those jobs get converted into permanent work. And hourly earnings did go up 3 cents for the month. Other industries showing good growth include health care and leisure and hospitality. Manufacturing went up 31,000, while in a worrying sign, construction jobs were flat.

Overall, this is a healthy jobs report, but here’s some perspective. The Federal Reserve Bank of Atlanta has a nifty jobs calculator where you can plug in numbers and see how long it will take to get to a certain unemployment rate. Assuming the same labor force participation rate, it will take over three straight years of growth like this to get to a normal unemployment rate of 5.5%. And if that labor force participation rate goes up, which is likely in a healthy job market, to say 64.5%, it would take well over four years to get to that same number.

UPDATE: From Dean Baker:

One very positive sign is that state and local government added 1,000 jobs, after adding 7,000 last month. This indicates that the sector will no longer be a drag on growth and could even provide some modest boost over the course of the year. On the negative side, wage growth may be weakening, with the hourly wage rising at just a 1.4 percent annual rate over the last quarter.

My understanding is that the job loss in the public sector came mostly from cuts to postal workers.

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David Dayen

David Dayen

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