For the month, the private sector expanded by 246,000 jobs. Governments at all levels lost 10,000 jobs. Last February, the BLS reported a 271,000 seasonally adjusted jobs gain, suggesting that economic growth had finally broken free of its sluggish performance. But then the numbers slipped for most of the rest of the year, just as they had in 2010.
Even at this improved level, however, the jobs created in February aren't enough to quickly restore the labor market to its pre-recession levels. And critics note that productivity gains are going almost exclusively to employers not workers. Moreover, median household income is 8.1 percent less than it was in 2000 and corporate profits have doubled. Put simply, on average, even those Americans with jobs are not faring as well as they were before the Great Recession.
The Bureau of Labor Statistics revised its previously reported growth in payroll employment for December from 196,000 to 219,000 and for January from 157,000 to 119,000. The BLS counted 12 million Americans as unemployed. The number of Americans unemployed for six months or more rose to 4.8 million. The civilian labor force participation ratio fell to 63.5 percent, its lowest level since September 1981; the employment-population ratio held steady at 58.6 percent, which is within the range it has been in for the past four years but had previously not clocked in at since 1983.
In addition to the official tally of jobs created and the unemployment rate, designated U3 in BLS jargon, the bureau also measures the situation with an alternative gauge called U6 that counts part-time workers who want full-time jobs and some but not all Americans who want jobs but have stopping looking for one. The U6 rate dropped to 14.3 percent. Add up the 12 million who are officially unemployed (U3), the 8 million underemployed (U6), and the 6.8 million who are not in the labor force but say they want a job, and you have 26.8. million unemployed and underemployed Americans.
The improvements, which have been beating forecasts for the past six months, are occurring against a background of huge and long-term unemployment. Moreover, a large percentage of the new jobs are not paying as much or providing as much in benefits as the jobs that were lost. Nonetheless, the report was far above what economists had expected, exactly equal to the average monthly gain in the Clinton administration, the best job growth era in the post-World War II era.
But there are fears that the federal budget sequester, which began March 1, could in the months ahead squelch the improvement in the job market. For the moment, however, a variety of mostly good economic news has raised optimism in some quarters:
Automakers and home-improvement retailers are among those announcing plans to take on more staff, which will lead to gains in incomes that may help the world’s biggest economy weather federal cutbacks and higher taxes. Today’s data may ratchet up debate among Federal Reserve policy makers, who are looking for “substantial” progress in the labor market to determine whether to maintain record stimulus.For more details about today's jobs report, please continue reading below the fold.
“There’s a lot of dry tinder in the economy,” Robert Dye, chief economist at Comerica Inc. in Dallas, said before the report. “If companies are experiencing growth in orders, they’re going to be able to look past these broader fiscal concerns. We’re still going to need to see ongoing solid gains in employment and steady drops in unemployment before the Fed eases off the gas pedal.”
On Wednesday, TrimTabs Investment Research estimated that 100,000 new jobs had been created in February. The firm calculates payroll job growth based on daily deposits of income taxes being withheld from people's paychecks.
Automated Data Processing, one of the nation's largest payroll services companies, reported Wednesday that the economy generated 198,000 new private-sector jobs in February. As I have previously explained:
The government's BLS jobs report is the product of a pair of surveys, one of more than 410,000 business establishments called Current Employment Statistics, and one called the Current Population Survey, which questions 60,000 householders. The establishment survey determines how many new jobs were added, always calculated on a seasonally adjusted basis. The CPS provides data that determine the official "headline" unemployment rate, also known as "U3." That's the number which is now 7.7 percent.Thus, because of this range of possibilities, the actual number of jobs gained in February could have been as low as 336,000 or as high as 136,000. For this reason, as better data are obtained, each month the BLS revises its count for the previous two months. Today's numbers will therefore be recalculated in the April and May reports.
The BLS report only provides a snapshot of what's happening at a single point in time. The jobs-created-last-month-numbers that it reports are not "real." Not because of a conspiracy, but because BLS statisticians apply seasonal adjustments to the raw data, estimate the number of jobs created by the "birth" and "death" of businesses, use other filters. In the fine print, they tell us that the actual number of newly created jobs reported is actually plus or minus 100,000.
Here's what the job growth numbers looked like in February over the previous 10 years. These data have been recalculated via the BLS's annual benchmark revisions:
February 2003: - 158,000
February 2004: + 43,000
February 2005: + 240,000
February 2006: + 316,000
February 2007: + 90,000
February 2008: - 85,000
February 2009: - 695,000
February 2010: - 40,000
February 2011: + 196,000
February 2012: + 271,000
February 2013: + 236,000
Among other changes in today's job report:
• Professional services: + 73,000
• Information industry: + 20,000
• Health care: + 32,000
• Retail trade: + 24,000
• Construction: + 48,000
• The average workweek (for production and non-supervisory workers) rose to 34.5 hours.
• Average manufacturing hours rose to 40.9 hours.
• The average hourly earnings for all employees on private nonfarm payrolls rose 4 cents to $23.82.