Posted on Fri, Mar. 04, 2011
last updated: March 15, 2013 11:57:58 AM
WASHINGTON — The U.S. economy turned in its best performance in February since the start of the Great Recession in December 2007, as evidence piles up that the recovery is strengthening, deepening and gaining solid footing.
Fridays report from the Bureau of Labor Statistics underscored that. It showed that the nations unemployment rate dipped to 8.9 percent last month as employers added an impressive 192,000 jobs across a broad range of industries.
That was the third consecutive monthly drop in the jobless rate, and at an impressively sharp pace.
The 0.9 percentage point drop in the unemployment rate over the past three months is the largest such decline since 1983, Austan Goolsbee, the head of the White House Council of Economic Advisers, said in a statement.
That 1983 rebound helped lift President Ronald Reagan to a landslide re-election the following year. President Barack Obama doubtless recalls that as the 2012 election cycle begins.
Today, the U.S. economy is crawling back from an even worse crisis than the one in the early '80s — at the time, the worst since the Great Depression — and Fridays report was an important milestone on the road to full recovery.
The economy must add at least 150,000 jobs a month to bring down the jobless rate as new workers enter the work force. Fridays numbers were the first to clear that margin significantly. Combined with other recent data showing strengthening production and sales, the February employment numbers confirmed that the economic recovery is taking root.
Even more heartening, the Bureau of Labor Statistics reported that private-sector employers added a robust 222,000 jobs last month. That means the outlook would be even brighter if not for the 30,000 state-and-local government jobs lost in February.
This is a very strong report, strongly arguing that the job market is gaining traction. The job gains were broad-based across industries, including the higher-paying manufacturing, transportation and professional services industries, said Mark Zandi, the chief economist for forecaster Moodys Analytics in West Chester, Pa. I expect even better job numbers as the year progresses, as businesses are flush with cash, enjoy solid balance sheets and are increasingly upbeat.
While the strong, broad hiring was a good sign that the heretofore sluggish recovery is gaining strength, it came on a day of additional worry that soaring oil and gasoline prices could weaken it. Rising fuel prices are like a tax on consumers, taking away their disposable income.
New fighting Friday in Libya continued to weigh heavily on oil markets, with crude oil topping $104 a barrel. The nationwide average for a gallon of regular unleaded gasoline leapt 4.4 cents overnight to $3.47, AAA said Friday. Thats up almost 20 cents a gallon from a week ago.
Worries about oil sent stocks lower, in spite of the positive job news. The Dow Jones Industrial Average fell 88.32 points to 12169.88
Still, the Labor Department jobs report was chock-full of positive indicators. Statisticians revised the previous two months reports up by 58,000 jobs. Since a low point in February 2010, the economy has added 1.3 million jobs.
The strongest February employment gains came in the broad category of professional and business services, which increased by 47,000 jobs.
Manufacturing and construction employment also rose last month, each by 33,000 jobs. If sustained, that could power the economy forward, since both sectors create a chain reaction in hiring by boosting demand for everything from trucks for delivering goods to suppliers of the office products needed to bill customers.
Manufacturing employment has grown by 195,000 jobs since it hit bottom in December 2009, the BLS said.
In construction, theres still an unemployment rate of almost 22 percent, and the positive February numbers werent yet deemed a trend. Construction employment is down 2.2 million jobs from its April 2006 peak.
Given what this industry has been through, figures like these are as welcome as they are long overdue, Ken Simonson, the chief economist for Associated General Contractors of America, said in a statement. The question now is whether these figures reflect a thaw in economic conditions for the industry, or the benefits of warmer weather and less snow in many parts of the country in February.
For all the positive signs, however, the economy still faces a long road ahead before full prosperity is restored.
New entrants into the work force combined with jobs lost during the Great Recession of 2007 to 2009 mean that 11 million jobs must be added to get back to full employment.
Heidi Shierholz, an economist with the liberal Economic Policy Institute, cautioned that the labor force remains 312,000 workers smaller than it was a year ago, despite the addition of 1.3 million jobs, because the potential work force has grown even more.
This is the first month where many of the indicators point positive and the jobs recovery appears to be gaining traction. However, some of Februarys growth is simply a positive rebound effect after bad weather last month, and the trend is modest, Shierholz said.
Improvements in the unemployment rate are only good news if a larger share of the potential work force actually finds work, which is not happening.
FEBRUARY BY THE NUMBERS
_ Professional and business services, up 47,000.
_ Health care, up 34,300.
_ Construction, up 33,000.
_ Manufacturing, up 33,000.
_ Transportation and warehousing, up 22,000.
_ Leisure and hospitality, up 21,000.
_ Temporary help services, up 15,500.
_ Financial services, up 3,000.
_ Retail, down 8,100.
_ Government, down 30,000.
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