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Posted at 12:37 PM ET, 03/ 4/2011

Feb. unemployment report: just 'decent'?

By Ariana Eunjung Cha

At first glance, the numbers in the February unemployment report are spectacular. An estimated 192,000 jobs were added last month to nonfarm payrolls, compared with 63,000 in January, 152,000 in December and 93,000 in November.

There are lots of reasons to view the report postively, as Washington Post economics reporter Neil Irwin tweeted:

This is the best all-around jobs report in three years. Stronger job growth in March-May of last year, but that was temp census hiring.less than a minute ago via TweetDeck

Drop in unemployment came about mostly for good reasons--more employed, fewer unemployed. Not people dropping out of labor force.less than a minute ago via TweetDeck

But look closer at the report and there are some big unanswered questions, the most important of which was articulated in a research note this morning from Capital Economics: "How much of last month's gain was a reversal of the severe weather impact in January?"

If the big jump in February was simply a bounce-back effect after people returned to work when the January snow started melting, then the labor market recovery isn't as strong as it might have been if the freak weather wasn't a factor.

There's evidence that weather conditions did play a role. If you break the new jobs down by sector, the biggest gains were in construction, which was up 33,000 after falling 22,000 in January.

A better way to analyze the numbers may be to average the past three months of gains, which amounts to 135,000 new jobs a month -- just barely enough to account for population growth.

That's why the most common words economic analysts are using to describe the report on Friday don't include spectacular, or anything close to that. They're saying the numbers are just "decent." Or "solid."

"The February employment report was solid, but it fell well short of the blowout that some in the market were expecting," Stephen Stanley, an analyst with Pierpoint Securities, wrote in a research note.

Connie Madon, writing in BloggingStocks, also sounds a note of caution, pointing out that "one month does not suddenly turn the economy into a boom. We would need six months of numbers around 200,000 to really make a dent in unemployment."

The second part of the monthly Labor Department report involves a separate household survey that focuses on employment (as opposed to the headcount survey of companies that is used for the jobs numbers). This was better than forecast. Unemployment had been expected to inch up from 9 percent to 9.1 percent. Instead, it fell to 8.9 percent.

The New York Times' Floyd Norris notes that "the last time the unemployment rate fell 0.9 percentage points in three months was in 1983. That was when the economy finally started to rise rapidly after the double-dip recessions of the early 1980s."

Analysts are trying to reconcile the seeming discrepancy between moderately higher payrolls and the much more positive rapid decline in the unemployment rate.

"For four months now, the relationship between employer-reported payrolls and household-reported employment has diverged, a most unusual situation," explained Guy LeBas, chief fixed income strategist for Janney Capital Markets.

Here's LeBas' theory:

As jobs become more plentiful, unemployed individuals are finding employment, causing both the firm and household-reported jobs growth. Individuals in the same household who hold multiple jobs are meanwhile cutting back, which results in a decline in firm-reported employment but no change in household-reported employment. In that sense, the household unemployment figures, which are improving more significantly than payrolls, arguably represent a more coherent picture of labor market health. In other words, the job markets may actually be trending a bit better than the most commonly-tracked monthly labor market metric suggests.

So, how does that bode for the rest of 2011?

Jon Ogg on 247WallStreet.com predicts that unemployment may fall to under 8 percent by the end of the year. On the other hand, he writes:

The sad part of the jobs data and unemployment data is that the workforce data keeps indicating a larger number of drop-offs from the workforce. The reality is that these still count "for the rest of us" and the employment situation is still quite far from robust.

And how will the jobs report affect the actions the Federal Reserve is taking to keep up the momentum in the economic recovery?

Analysts aren't showing much consensus.

Here's the view of Michael Gapen of Barclays Capital Research:

We do not see this report as causing the Fed to alter the stance of its asset purchase program as most FOMC members have said that they need to see much stronger job creation before characterizing the recovery as having taken hold. We continue to see little to change our view that the Fed will complete its intended $600bn in purchases of Treasury securities by the end of the second quarter.

By Ariana Eunjung Cha  | March 4, 2011; 12:37 PM ET
Categories:  Federal Reserve, Manufacturing, U.S. Economy, U.S. Labor Department, Unemployment  
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Next: Economic agenda: Monday, March 7, 2011

Comments

I live in Nevada and for the first time in a long time, I'm seeing help wanted signs.

Posted by: farmsnorton | March 4, 2011 1:14 PM | Report abuse

I just bought an aluminum frying pan at Sam's made in the USA. A pretty good one.

Posted by: Anonymous | March 4, 2011 1:56 PM | Report abuse

Whoop dee doo! There are STILL too many unemployed!

Posted by: SeniorVet | March 4, 2011 2:14 PM | Report abuse

Where are they coming up with these numbers for a dip in unemployment? They can"t be counting everyone, because I still haven't found employment and I diligently look & apply everyday. Why is it that a CRIMINAL or someone on PROBATION can get a job before someone who has no criminal record? For instance ME! The system is backwards if you ask me. So in order for me to get a job...I have to commit a crime, go to jail to be on a workforce program????? I have been unemployed for 2 years, I have 25 years of experience in the medical field, no criminal record, unemployment benefits are exhausted, I'm a widow, I have no disabilities, I can't get my social security until I'm 65 or 67. I'm homeless living in a shelter that has no programs for someone like me, I can't get help unless I'm blind, cripple, or crazy or have lots of babies to get welfare. This is outrageous. Tell me what is Obama doing for someone like me.....NOTHING!

Posted by: Anonymous | March 4, 2011 3:08 PM | Report abuse

If "anonymous" can't find a job in the medicl field, then it's likely that anonymous has issues with form the test of the comment, blaming others for his/her refusal to do what it takes to get a job. Health care is one field that has been barely affected by the downturn.

Posted by: wd1214 | March 4, 2011 3:56 PM | Report abuse

Although this is not the moral of the stories, read "The Big Short" and "Too Big To Fail", and you will see this economic system we profess to love is rigged for the people at the top. And by the people at the top, I mean the people who make hundreds of millions of dollars. The rest of us are just chumps for playing along for our crumbs.

Posted by: wrw01011 | March 4, 2011 4:02 PM | Report abuse

Not everone is counted in the unemployment numbers. I know scores of small self employed contractors that can't find work. Many homeowners are sidelined with their own financial worries and are not hiring contractors to remodel. Another issue is competition for jobs that do arise.The mantra has been the illegal immigrants are taking on jobs that Americans don't want. That's BS. Why don't you tell the US born roofers, painters, carpenters, cement masons, brick layers that we don't want those jobs and see what kind of response you get. Take a lool at the work crews in your neighborhood and I'll bet you the immigrants are working for depressed wages and NOT paying payroll taxes nor are the employers.

Posted by: Anonymous | March 4, 2011 4:44 PM | Report abuse

When the sum of the parts don't add up to the whole of the sum then I say that it's time to consider the need for change. And based on the math of late, I propose that instead of calling this thing that we measure every month as an unemployment "rate", I say that what we need do instead is change it's name to an unemployment "index" ? Because as we have recently seen over the past 8 months or so, rates and rate of changes don’t add up, and as a result, the "results" can't be compared. For to me it's like I am somehow being forced to give special credit to an underprivileged performer, so as to balance the overall measure. And as I do not consider myself to be underpriviledged or an underperformer, it kinda ticks me off when this form of imbalanced measure is forced upon me. For in short, I see yet another example in this country of using one type of measurement to mean something that it is not, in order to suggest improvement. And who thinks like this; except perhaps for banks across America who offer a kind of tier lending rates driven by the imbalance of what you can’t really afford a purchase? My God, it’s everywhere.

Posted by: jralger | March 4, 2011 4:44 PM | Report abuse

Jon Ogg is correct, many unempployed have dropped out of the work force and are no longer looking. I was part of a mass layoff of 608, and only 217 are employed 2 years later. The rest had to take early retirement. I have several college degrees and 35 years experience, but no job.

Posted by: computernut | March 4, 2011 5:25 PM | Report abuse

Oh goodie the dollar is about to collapse and inflation is going to make a loaf of bread $20. will those new jobs cover that? This is just BS spin for BO Do not believe what you read in this rag. What about the commidies. Gold silver Dollar index food prices and the biggie GAS, Hello dreamers your about to be in a soup line. Self sufficent is the best idea.

Posted by: Sam | March 4, 2011 6:22 PM | Report abuse

You believe that and I water front property for sale in Az. the reason why the unemployment is down is because people have run out of unemployment Insurance.. and they are not getting any more.. Don't believe the lie

Posted by: Anonymous | March 4, 2011 7:13 PM | Report abuse

What some people don't understand is that there are people that have run out of their unemployment benefits and are no longer on the unemployment rolls . So they are not counted. And there a thousand of people out there looking for work that are not counted .

Posted by: Anonymous | March 4, 2011 8:14 PM | Report abuse

Anonymous is correct, employers do not want experience in any field...costs too much. Jobs on the market are now paying what they paid 30 years ago. Too much experience is looked at by employers as an aged employee with too much experience. Why do you think the majority of people going back to work are under employed?

Posted by: Anonymous | March 5, 2011 12:23 AM | Report abuse

The second you no longer can draw unemployment you are no longer counted. So how many people are just out of unemployment? It drives me nuts when someone says the people are not looking you first have to have work to look for. I just happen to be one of those with no unemployment and I still am looking for work.

Posted by: Anonymous | March 5, 2011 7:01 AM | Report abuse

It is easy to seemingly reduce the unemployment when you change the parameters by which they are judged. Especially when you eliminate the most valued. Do you not get tired of being lied to, so they can make their case? If they lie, cheat and steal, then who know what else they are up too. Let the truth be known, the truth shall prevail.

Posted by: Anonymous | March 5, 2011 9:53 AM | Report abuse

It is easy to seemingly reduce the unemployment when you change the parameters by which they are judged. Especially when you eliminate the most valued. Do you not get tired of being lied to, so they can make their case? If they lie, cheat and steal, then who know what else they are up too. Let the truth be known, the truth shall prevail.

Posted by: Anonymous | March 5, 2011 9:54 AM | Report abuse

Americans need to get smarter! Obama AND the media are lying to us all. Unemployment hasn't magically dropped into the "politically safe zone" for the regime-overnight! I don't care how they spin, package, or manipulate it... 8.9% is BS. Elitist pigs.

Posted by: Anonymous | March 6, 2011 7:07 AM | Report abuse

To wrw01011: are you for real or one of those professional propaganda bloggers?? u sound an awful lot like the cancer that is eating the core of this great country. NOT capitalism. Its the socialist, Marxist, communist perversion we're all suffering from.

Posted by: Anonymous | March 6, 2011 7:26 AM | Report abuse

Until gas prices ($3.05 a gallon +/-) fall and the unemployment rate (8.9%) drops the housing market will not significantly improve. Mortgage rates at 5% and the housing market is still weak tells you something else is the problem (gas prices and unemployment). The economy is nearly as bad as when Carter was president. I saw a recent statistic that showed that evey one cent increase in the price of a gallon of gas causes the economy to lose $41 billion. People are justifiably gloomy given the economic numbers, the gas prices, and the rising cost of food. Government shutdowns and layoffs (and the threat of shutdowns and layoffs) will continue to cause pessimism for the foreseeable future.

Job growth needs to be above 120,000 a month for a long period of time to balance out all the jobs lost during this recession.

Posted by: Anonymous | March 6, 2011 1:03 PM | Report abuse

if the amount of jobs that were filled doesn't even cover the amount of jobs needed for those entering the work force...
how could the unemployment rate go down...
seems to me the obama administration is starting early in lying to the American people...
this time it won't work...
here is obama's dilema...
as President he better show substantial job growth...
his adversaries don't have to prove nothing...
he must prove he can do that job...
win the approval of the American unemployed...

Posted by: DwightCollins | March 6, 2011 2:32 PM | Report abuse

how to win the approval of the American unemployed...
level the playing field...
make it easier for them to get jobs...
where their are needs...
jobs can be created...

Posted by: DwightCollins | March 6, 2011 2:37 PM | Report abuse

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