Unemployment stays at 8.3%, 227K jobs added

It looks like the ADP report was more predictive than Gallup for February’s job numbers.  The Bureau of Labor Statistics reports that 227,000 jobs were added in February while the unemployment rate remained level at 8.3%:

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Nonfarm payroll employment rose by 227,000 in February, and the unemployment rate was unchanged at 8.3 percent, the U.S. Bureau of Labor Statistics reported today. Employment rose in professional and businesses services, health care and social assistance, leisure and hospitality, manufacturing, and mining.

Why didn’t the unemployment rate drop if we added 227K jobs? It dropped by three-tenths of a percent with similar job-creation numbers last month. This month, the workforce number increased:

The number of long-term unemployed (those jobless for 27 weeks and over) was little changed at 5.4 million in February. These individuals accounted for 42.6 percent of the unemployed. (See table A-12.)

Both the labor force and employment rose in February. The civilian labor force participation rate, at 63.9 percent, and the employment-population ratio, at 58.6 percent, edged up over the month.

The U-6 number, which has been used as a gauge of “real unemployment” — dropped to its lowest level in years, 14.9%, down from 15.1% in January and 15.9% in February 2011.  The number of those unemployed for five weeks or less rose as a percentage of overall unemployed, from 19.3% in January to 19.9% in February, while those jobless for 5-14 weeks rose fell from 22.4% to 22.0%. The civilian participation rate rose from 63.7% to 63.9%, and the employment-population ratio rose from 58.5% to 58.6% — not dramatic, but a step in the right direction.

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Still, Gallup is usually a good indicator of what is to come in either the same month or the month following.  Until then, this is a good jobs report, although not significant enough to make a big dent in the massive overhang of joblessness.  At this rate, it would take close to three years to get back to the pre-recession level of employment in the US.

Update: Reuters gets to what’s important in this report by the third paragraph:

Employment grew solidly for a third straight month in February, a sign the economic recovery was broadening and in less need of further monetary stimulus from the Federal Reserve.

Employers added 227,000 jobs to their payrolls last month, the Labor Department said on Friday, while the unemployment rate held at a three-year low of 8.3 percent.

It marked the first time since early 2011 that payrolls have grown by more than 200,000 for three months in a row – bolstering President Barack Obama’s chances for re-election.

Unexpectedly?

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David Strom 6:40 PM | April 18, 2024
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