Economy gained 227K jobs in Feb.; more unemployed rejoin workforce

March 9, 2012

As the country logs its third straight month of strong job growth, economists and politicians are daring to hope that a recovery dogged by false starts and sluggishness is finally taking hold.

The Labor Department reported Friday that the economy added 227,000 jobs last month, more than analysts had expected. It also said job growth in January and December — which was already robust — was even better than previously thought. It revised those figures upward by 61,000 positions.

Even the bad news came with a positive spin: Although the monthly unemployment rate remained unchanged in February, at 8.3 percent, economists said that was a result of more people starting to look for work again in response to the growing economy. Government data showed that 476,000 people joined the labor force last month.

“To the extent there is a debate, it’s whether the economy is recovering or recovering strongly,” said Justin Wolfers, visiting professor of economics at Princeton University.

Of course, the optimism is still tempered with caution. The nation reported similar job growth around the same time last year that petered out during the second quarter. High gas prices could eat away at consumer spending and stifle demand. Some projections for the first quarter predict an annualized growth rate of less than 2 percent, a particularly anemic outlook considering the labor market gains.

But the scope of February’s job growth — encompassing manufacturing, health care, hospitality and all the other sectors — indicates that the rebound is more deeply rooted. Even the public sector staunched its losses after shedding an average of 22,000 positions a month last year. February also marked the 17th consecutive month of job increases, a record that is difficult to ignore.

“Overall, another very strong payroll report, and there’s every chance that March will bring more of the same,” said Paul Ashworth, chief U.S. economist for Capital Economics.

In Washington and on the campaign trail, politicians balanced enthusiasm for the improving job market with an acknowledgement that nearly 13 million people remain unemployed.

The White House said the data show the economy is “continuing to heal” from the wounds of the “Great Recession” but also warned against reading too much into one month’s report. Speaking at a jet-engine plant Friday, President Obama said the recovery is getting stronger, and he highlighted gains in the industrial sector.

“When I come to places like this and see the work being done, it gives me confidence there are better days ahead,” he said. “The key now, our job now, is to keep this economic engine churning.”

Meanwhile, Republicans pointed to higher gas prices and the number of long-term unemployed people as signs that the president’s economic initiatives were not gaining enough traction.

“It is a testament to the hard work and entrepreneurship of the American people that they are creating any jobs in the midst of the onslaught of anti-business policies coming from this administration,” House Speaker John A. Boehner (R-Ohio) said Friday.

On the presidential campaign trail Friday, former Massachusetts governor Mitt Romney did not specifically mention the new unemployment figures, but he pointed out that millions of Americans remain out of work or underemployed. At a town hall gathering in Jackson, Miss., he continued to attack Obama’s handling of the economy.

“We have fewer jobs. We have more debt. And we have bigger government,” Romney said. “That’s why we have to get him out of office.”

The unemployment rate had been steadily declining since August, when it was 9.1 percent. Despite February’s flatline, economists say the pace of hiring in recent months makes it more likely the jobless number will fall below 8 percent before the presidential election in November.

The bulk of the job growth came in professional and business services, and more than half of those positions were in temporary employment. Tig Gilliam, chief executive of Adecco Group North America, a staffing agency, said that bodes well for the job market in the coming months. Temporary employment is often a leading indicator of a broader upswing and optimism among businesses.

“That shows that they have demand,” Gilliam said. “They have work they need to get done.”

The big picture also benefited from a slowdown in public-sector job losses. Government employment was essentially unchanged in January and February, government data showed. Several economists said that could signal the start of a turnaround in the revenue outlook of state and local governments.

The Labor Department revised its estimate of January job growth upward by about 41,000 jobs, to 284,000, the biggest monthly gain since 2010. December’s estimate was increased by about 20,000 jobs, to 223,000.

U.S. stock markets ended Friday slightly up after the jobs report. The Dow Jones industrial average gained 14 points, or 0.1 percent, to close at 12,922, and the tech-heavy Nasdaq rose 17.9, or 0.6 percent, to 2988. The broader Standard & Poor’s 500-stock index closed up 5 points, or 0.4 percent, at 1371.

Overseas, the threat of a European financial crisis eased Friday as Greek officials reached an agreement with creditors to reduce its overwhelming debt. The move was intended to help the country stabilize its economy and stave off an impending default. Many economists had feared that a default could trigger a broader meltdown that would reverberate even in the United States.

Unemployment, however, continues to cast a pall over the economic outlook. The number of people out of work remains high, and nearly 43 percent of those who are jobless have been looking for a job for at least six months.

Megan Ellis, an economist for John Hancock Financial Services, said the next few months will show how sustainable and robust the recovery might be.

“The labor market has momentum,” she said. “What we need now is acceleration.”

Staff writers Howard Schneider, David Fahrenthold and David Nakamura contributed to this report.

Ylan Q. Mui is a financial reporter at The Washington Post covering the Federal Reserve and the economy.
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