Economic Notes: A Positive Jobs Report…Finally
3/08/2010
By Patrick O'Keefe, Director of Economic Research, J.H. Cohn
The Bureau of Labor Statistics (BLS) reports that in February, for the fifth consecutive month, employment was virtually unchanged (-0.3%) despite a blizzard in the East. Two years of hemorrhaging jobs appears at an end.
On close examination, BLS’s February report was its most positive since the recession began. With but a few exceptions (discussed below), most employment sectors were stable month-on-month.
February’s jobs loss (36,000) was split evenly between private and public employers.
The private sector’s miniscule drop (-0.02%) was driven by the still-shrinking construction sector, which lost 60,000 jobs and is down by more than 25% since the beginning of the recession. The other major component of the goods-producing industries, manufacturing, grew marginally for the second straight month.
Private service providers added jobs for the second consecutive month. The gains were concentrated in temporary help services, which is up 16.5% (284,300 jobs) since September, and the recession-resistant health and education sectors. The sustained rise in temporary employment suggests that broader, more robust jobs growth is likely in the next few months.
Public sector employment, which was relatively stable over the course of the downturn, accounted for the other half of February’s decline.
Falling revenues forced localities and the Postal Service to shed more jobs than were added by states and the Federal government (+15,000 Census workers). Public sector jobs have fallen in three of the past four months, a trend that looks likely to continue (despite the Census Bureau’s temporary hiring) due to continuing fiscal pressures at the state and local levels.
In its separate survey of households, BLS found the number of unemployed up a tad (+0.2%) in February; but since it peaked in October, total joblessness has fallen by some 740,000 (4.7%) individuals. As a result, the unemployment rate (i.e., the proportion of the labor force actively seeking jobs) has fallen from 10.1% to 9.7%.
The household survey hints at an improving outlook – respondents indicate that labor force participation and employment have risen in each of the last two months, while spells of unemployment shortened. But conditions remain generally weak and, therefore, consumers are likely to remain subdued.
February’s was the most positive jobs report since 2007 even though the only metropolitan area to gain jobs in 2009 – Washington, D.C. and its suburbs – was paralyzed by snow – natural, not political.
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