Analysis of the BLS Employment Situation Report

<>   MRINetwork Analysis of the BLS Employment Situation Report Feburary 2012 Employment The full report can be seen here: http://www.bls.gov/news.release/empsit.htm. According to the Labor Department, the U.S. economy added 227,000 jobs in February, the third month in a row of job gains in excess of 200,000 positions. Unemployment remained at 8.3 percent, its lowest point since early 2009. Revisions to previous months showed that January added 41,000 more jobs than previously reported and December added 20,000 more. Growth was concentrated in the services sector, however, there was meaningful growth in important segments of manufacturing—including machinery, fabricated metals, and transportation equipment—all three harbingers of a manufacturing economy spinning up. In the services sector, the only significant loss was of 35,000 positions from general merchandise stores, though it was likely a continuation of the ramp down from holiday hiring, rather than a sign of changing tides for retail. Professional and business services were responsible for more than a third of all job growth in February, with growth in accounting and bookkeeping services (7,300), architectural and engineering services (4,300), computer system design services (10,200), and managing and consulting services (7,400). Healthcare services accounted for more than a quarter (61,100) of jobs produced during the month. Lastly, food services and drinking places added more than 40,000 positions as workers with a bit more disposable income and more confidence in the stability of that income have begun to go out to eat and drink a bit more. On an education level-basis, new positions created were exclusively being filled by those with 4-year degrees and up. The total number of employees holding a 4-year degree or higher rose by more than 380,000 during the month. The professional and managerial unemployment rate fell from 4.9 to 4.2 percent year-over-year. Unfortunately for trend spotters, February, March, and April of 2011 also saw 200,000+ job growth before decelerating during the summer months. The reasons blamed for job growth falling—such as rising gas prices, a European debt crisis, and Middle East instabilities—all remain on the horizon. Yet, this round of job reports adding in excess of 200,000 at a time started two months earlier than last time around, and is being met more strongly with rising consumer confidence. While the trend may seem similar to the one that fizzled a year earlier, it may also be just positive enough to have reached an “escape velocity”, as Patrick O’Keefe, the director of economic research at consulting firm J. H. Cohn, characterized it to The New York Times. Enough jobs are being created to add enough consumers to the market to necessitate more employees be hired.

Employment grows solidly for third straight month

By msnbc.com staff and wire reports


U.S. employment showed sturdy growth for the third straight month in February, demonstrating that the recovery continues to chug along at a modest pace.

The Labor Department reported Friday that employers added a larger-than-expected 227,000 jobs last month, while the unemployment rate remained at 8.3 percent. Economists had expected the economy created 210,000 jobs last month, according to a Reuters survey

It marked the first time since early 2011 that payrolls have grown by more than 200,000 for three months in a row.

The economy created 61,000 more jobs in December and January than previously thought, and the jobless rate held steady even as more people returned to the labor force.

Although the job market is gaining some muscle, the pace of improvement remains too slow to do much to absorb the 23.5 million Americans who are either out of work or underemployed.

Fed Chairman Bernanke last week described the labor market as "far from normal" and said continued improvement would require stronger demand for U.S. goods and services.

Still, he suggested the outlook would have to deteriorate for the U.S. central bank to launch another round of bond buying to drive interest rates lower. Officials said in January they expected growth this year to be no higher than 2.7 percent.

The jobs report, which sets the tone for financial markets worldwide, added to the list of data highlighting the U.S. economy's underlying strength.

It also provided a hopeful sign for the global recovery at a time that growth is slowing in China and the euro zone appears to be sliding into recession. The jobless rate in the 17-nation euro zone area rose to 10.7 percent in January, the highest since the euro started circulating in 2000.

In contrast, the U.S. unemployment rate has dropped 0.8 percentage point since August, providing some relief to President Barack Obama, who faces an election battle in which the economy has been center stage.

Economists predict the jobless rate could fall below 8 percent by November, even if the recent firming in the jobs market lures Americans who have given up the search for work back into the labor force.

The labor force participation rate - the percentage of working-age Americans either with a job or looking for one - rose to 63.9 percent from 63.7 percent in January.

Did you opt not to go to college? We want to hear from you!

The separate survey of households that is used to measure the jobless rate showed even brisker hiring in February.

While some parts of the jobs market have benefited from unseasonably warm winter weather, economists say a genuine improvement is under way, even though they expect a slight pull back in March.

Private companies again accounted for all the job gains in February, adding 233,000 positions. Government employment fell a modest 6,000, declining for a sixth straight month.

Manufacturing, which in January recorded the largest gain in a year, dominated job creation in February, hiring 31,000 new workers. The sturdy job gains reflect stepped up auto production.

Most auto companies are taking on new workers and adding shifts and overtime to meet pent-up demand after production was disrupted early last year following the tsunami and earthquake in Japan.

Average hourly earnings increased three cents in February. Average hourly wages have increased 1.9 percent in the 12 months through February.

The overall workweek held steady at 34.5 hours - holding at the highest level since August 2008.

Earnings are being closely watched for signs of wage inflation after unit labor costs grew much more strongly than initially thought in the third and fourth quarters of 2011.

Outside manufacturing, construction payrolls fell 13,000, the first decline in four months.

Although hiring has quickened, the economy faces persistent long-term unemployment. In February, about 43 percent of the 12.8 million unemployed Americans had been out of work for more than six months.

Reuters contributed to this report.
http://economywatch.msnbc.msn.com/_news/2012/03/09/10621372-employment-grows-solidly-for-third-straight-month