Despite winter storms, February job figures better than expected
Saturday, March 6, 2010
A few feet of snow in February was not enough to impede the steady healing of the job market, according to data released Friday that showed the U.S. economy's tepid recovery remained on track.
The Labor Department reported that the nation shed 36,000 jobs and the unemployment rate held steady at 9.7 percent, figures that surpassed many forecasters' expectations. Some economists had predicted that last month's snowstorms would boost the jobless rate and create job losses in the six figures.
The better-than-expected numbers helped lift the stock market, with the Standard & Poor's 500-stock index rising 1.4 percent to its highest level since mid-January.
Combined with other strong economic indicators released this week -- improved results in a key survey of service businesses, for example, and a drop in new claims for jobless benefits -- Friday's unemployment numbers dispelled some doubts about whether the expansion has continued through the winter. The economy appears to be set to continue growing through 2010, although too haltingly to create any dramatic decline in unemployment, economists said.
"Through snowstorms and everything else, we're still on track for this moderate, half-speed recovery," said Stuart G. Hoffman, chief economist at PNC Financial Services Group.
Monthly job losses have fallen dramatically from a recent peak of 779,000 jobs in January 2009. But the bad news is that the job market has flat-lined lately, averaging a loss of 27,000 jobs over the past four months, and it has done so at a level of joblessness that is awful by any historical measure.
A broader measure of unemployment that includes people who have given up looking for a job or are working part time out of frustration actually rose in February, to 16.8 percent from 16.5 percent.
The good news is that things are looking a bit better for coming months. March employment results should be significantly stronger, as people who could not report to work during the snowstorms in the second week of February reappear on employers' payrolls and hiring for the once-a-decade census ramps up.
If the March numbers, to be released in the first week of April, are anything other than the best results since before the recession began in December 2007, it will be a big disappointment.
And the underlying labor market trend might be starting to improve, even apart from those one-time adjustments in March. For example, Monster Worldwide, the job search company, prepares an index of placements of online recruitment ads at its Web sites and those of competitors. That index rose 2 percent in February compared with a year earlier, the first gain since the end of 2007. The index tends to presage hiring by about two months.
"It's still relatively weak compared to the peaks we saw in the mid-2000s," said Jesse Harriott, chief knowledge officer at Monster. "But it's definitely a trend reversal, not just a one-month tick."
Similarly, the Labor Department report showed that the nation added 48,000 temporary jobs in February, the fourth straight month of gains. Companies frequently add temps when they see increased demand, then add permanent employees later if demand for their products continues.