Story URL: http://news.medill.northwestern.edu/chicago/news.aspx?id=182020
Story Retrieval Date: 5/23/2013 6:34:20 AM CST
Bureau of Labor Statistics/Moran Zhang/MEDILL
The unemployment rate fell to 8.9 percent, and 222,000 jobs were added in the private sector, according to Friday’s report from the Bureau of Labor Statistics.
This is the first time since April 2009 that the unemployment rate registered at below 9 percent. Economists had expected the jobless rate to inch up to 9.1 percent from 9.0 percent in January.
Paul LaPorte, Chicago branch chief at BLS, found the unemployment decline especially significant in that the labor force grew by 60,000 in February. “We’re headed in the right direction there with those types of numbers,”he said.
“We are playing a little bit of catching up in February, and this should provide some good momentum,” said Adolfo Laurenti, deputy chief economist and managing director at Mesirow Financial Holdings Inc.
Laurenti is optimistic about the economy and believes that the numbers are at the “right temperature.”
However, Laurenti pointed out that he believes further improvement will be relatively modest for the rest of the year, due to the possibility of a further recovery in the labor participation rate, which usually puts some upward pressure on the unemployment rate.
“But that said, as long as we continue to create 200,000 or 250,000 jobs a month for several months, that would really help the economy,” Laurenti said.
Nonfarm payrolls rose by 192,000 last month, showing big gains in construction and manufacturing sectors. Both sectors added 33,000 jobs in January.
In the services sector, wholesale trade transportation and warehousing, and professional and business services were the top performers. Retail trade employment fell by 8,100.
The report also showed a trim in government payrolls of 30,000.
Last month, there were still 1 million discouraged workers, but that number has declined by 184,000.
“Compared to previous year-over-year changes, that’s the second month in a row to record a decline in the number of discouraged workers since late 2008,” LaPorte said.
The average workweek for all employees remained unchanged at 34.2 hours in February, while average hourly earnings inched up 1 cent to $22.87.
Despite all the good news, some economists remain a little concerned, saying the numbers are good, but not enough.
Paul Ashworth, chief U.S. economist with Capital Economics, said while he sees the lower jobless rate as an encouraging sign, he feels that the downward trend over the last few months has been driven partly by people leaving the labor force, rather than actual job gains.
“We don’t just want the pace of the decline in the unemployment rate to be maintained, we want that rate to come down very sharply,” Ashworth said. “And we want that rate to come down because the economy is creating jobs.”
Ashworth believe America would probably need to create 250,000 or 300,000 new jobs a month, which is the average of what is normally seen during economic recoveries.
“At one point during the recession, we were seeing 800,000 jobs per month lost,” Ashworth said. “The fact that we are adding 135,000 on average over the last three months isn’t that much at all.”
Compared to the 4.5 percent before the recession began, the unemployment rate now is still "incredibly high,"Ashworth said.
The report showed 43.8 percent of unemployed Americans, or close to 6 million people, were out of work for more than six months in February, compared with 44.8 percent, or a bit above 6 million, in the previous month.
Economists say, the longer someone is without a job, their skill would atrophy, and the harder it is to find work. When they do, they tend to end up in much lower-skilled jobs.