March 5, 2010 12:29 PM
- Text
Unemployment Rate Holds Steady at 9.7%
Blank unemployment claim form on a desktop (iStockphoto)
(CBS/AP)
The U.S. unemployment rate held at 9.7 percent in February as employers shed 36,000 jobs, fewer than expected. The figures suggested the job market is slowly healing but that significant hiring has yet to occur.
The Labor Department wouldn't quantify how the snowstorms that hammered the East Coast last month affected job losses. Economists said the storms probably inflated job losses but by less than predictions of 100,000 or more. Without the storms, the economy likely would have seen a net jobs gain in February for only the second time since the recession began two years ago.
"Things could be worse. There are some signs here that things are improving a little bit and if you take the weather out of the equation things would have been slightly up," Peter Cappelli, a professor of management at the University of Pennsylvania's Wharton School of Business, told CBS Radio News.
Doubts about last month's data arose because the snowstorms occurred on the same week that the government surveys businesses about their payrolls. Employees who couldn't make it to work and weren't paid weren't included on those payrolls.
"It looks like the impact of weather was not as large as we thought it would be," said Marisa DiNatale, an economist at Moody's Economy.com.
Polls: Americans Remain Worried About Job Loss
Nigel Gault, chief economist at IHS Global Insight, said private employers will likely add jobs in March and continue to generate jobs for the rest of the year.
In a sign that the job market may be strengthening, companies hired 50,000 more temporary workers in February than they did the previous month.
"The fact that the temporary help industry reports an increase … is probably a good sign. Companies start hiring temps before they start hiring regular employees," Cappelli said.
Still, hiring is likely to be weak for much of that time. The recession eliminated about 8.4 million jobs. And it takes 100,000 new jobs per month just to keep up with population growth and keep the unemployment rate from rising.
Even optimistic economists don't expect employers to add much more than 150,000 jobs a month — and not until the second half of this year. Gault expects the jobless rate will remain above 9.5 percent by the end of 2010.
And many Americans remain pessimistic about the job market. According to CBS News/New York Times poll in February, more than half the country is worried that someone in their household will lose their job in the next year, including 31 percent who said they were "very" concerned about the prospect.
On Thursday, the House passed legislation giving companies that hire the jobless a temporary payroll tax break. Economists doubt, though, that it'll create many jobs. President Barack Obama and the Democratic Party are under pressure to address the jobs crisis in a congressional election year.
"The report today shows a labor market with no momentum," said Larry Mishel, president of the liberal Economic Policy Institute. "Employment is not growing. And even a generous interpretation of the snow's impact suggests that the underlying trend is insufficient to drive down unemployment in the near future."
Nearly 14.9 million Americans are unemployed — nearly twice the total when the recession began. The Labor Department revised its estimate of job losses for January from 20,000 to 26,000.
Hiring for the 2010 Census accounted for 15,000 jobs last month, the department said. The government expects to hire 1 million temporary census workers this year.
The February Census gains were countered by steep losses in local government jobs, particularly in education. Overall, government at all levels lost 18,000 jobs.
The stock market rose in response to the report. The Dow Jones industrial average rose 68 points, while broader indexes also gained.
Many economists predicted the snowstorms would artificially inflate job losses. The storms occurred in the week that the government surveys businesses about their payrolls. Employees who couldn't make it to work and weren't paid aren't included on those payrolls.
But many industries that economists thought might be hardest hit - construction, retail, and hotels and restaurants — didn't seem to be heavily affected. The construction industry lost 64,000 jobs, compared with an average of about 40,000 in the previous three months. Retail employment was flat and the leisure and hospitality industry posted a net gain of 7,000 jobs, the first increase since September.
The unemployment rate, which hasn't risen since October, may be bottoming out. But economists caution that many of the unemployed have given up on their job searches and aren't included in the jobless rate.
Many of those discouraged workers will likely resume looking as the economy improves. As hiring is likely to remain slow, the influx of jobseekers could boost the jobless rate.
When discouraged workers are included, along with those working part-time because they can't find full-time work, the so-called "underemployment" rate rose to 16.8 percent last month from 16.5 percent. That reflects a jump in the number of involuntary part-time workers. The figure is below October's all-time high of 17.4 percent.
Christina Romer, chair of the White House's Council of Economic Advisers, said the report was "consistent with the pattern of stabilization and gradual labor market healing we have been seeing."
One encouraging sign in the report: The number of long-term unemployed — those out of work for six months or more — fell for the first time since November 2008, to 6.1 million from 6.3 million. Still, about 40 percent of the unemployed have been out of work six months or longer.
The average work week dropped to 33.8 hours from 33.9 the previous month. That's a negative sign: Employers are expected to increase the hours for their current employees before hiring new workers.
Still, economists said much of the drop in hours worked was reported by construction workers and likely reflects the impact of bad weather. The department said more than 5 million people worked fewer hours last month because of the snow.
Job losses have moderated sharply in the past year. The economy shed an average of about 700,000 jobs in the first three months of 2009.
New hiring is desperately needed after the worst recession since the 1930s. The economy grew at a 5.9 percent rate in the October-December quarter last year, the fastest pace in six years. But most economists expect the pace of growth to slow to about 3 percent in the current quarter, which won't be fast enough to quickly bring down the jobless rate.
The Labor Department wouldn't quantify how the snowstorms that hammered the East Coast last month affected job losses. Economists said the storms probably inflated job losses but by less than predictions of 100,000 or more. Without the storms, the economy likely would have seen a net jobs gain in February for only the second time since the recession began two years ago.
"Things could be worse. There are some signs here that things are improving a little bit and if you take the weather out of the equation things would have been slightly up," Peter Cappelli, a professor of management at the University of Pennsylvania's Wharton School of Business, told CBS Radio News.
Doubts about last month's data arose because the snowstorms occurred on the same week that the government surveys businesses about their payrolls. Employees who couldn't make it to work and weren't paid weren't included on those payrolls.
"It looks like the impact of weather was not as large as we thought it would be," said Marisa DiNatale, an economist at Moody's Economy.com.
Polls: Americans Remain Worried About Job Loss
Nigel Gault, chief economist at IHS Global Insight, said private employers will likely add jobs in March and continue to generate jobs for the rest of the year.
In a sign that the job market may be strengthening, companies hired 50,000 more temporary workers in February than they did the previous month.
"The fact that the temporary help industry reports an increase … is probably a good sign. Companies start hiring temps before they start hiring regular employees," Cappelli said.
Still, hiring is likely to be weak for much of that time. The recession eliminated about 8.4 million jobs. And it takes 100,000 new jobs per month just to keep up with population growth and keep the unemployment rate from rising.
Even optimistic economists don't expect employers to add much more than 150,000 jobs a month — and not until the second half of this year. Gault expects the jobless rate will remain above 9.5 percent by the end of 2010.
And many Americans remain pessimistic about the job market. According to CBS News/New York Times poll in February, more than half the country is worried that someone in their household will lose their job in the next year, including 31 percent who said they were "very" concerned about the prospect.
On Thursday, the House passed legislation giving companies that hire the jobless a temporary payroll tax break. Economists doubt, though, that it'll create many jobs. President Barack Obama and the Democratic Party are under pressure to address the jobs crisis in a congressional election year.
"The report today shows a labor market with no momentum," said Larry Mishel, president of the liberal Economic Policy Institute. "Employment is not growing. And even a generous interpretation of the snow's impact suggests that the underlying trend is insufficient to drive down unemployment in the near future."
Nearly 14.9 million Americans are unemployed — nearly twice the total when the recession began. The Labor Department revised its estimate of job losses for January from 20,000 to 26,000.
Hiring for the 2010 Census accounted for 15,000 jobs last month, the department said. The government expects to hire 1 million temporary census workers this year.
The February Census gains were countered by steep losses in local government jobs, particularly in education. Overall, government at all levels lost 18,000 jobs.
(AP/CBS)
Many economists predicted the snowstorms would artificially inflate job losses. The storms occurred in the week that the government surveys businesses about their payrolls. Employees who couldn't make it to work and weren't paid aren't included on those payrolls.
But many industries that economists thought might be hardest hit - construction, retail, and hotels and restaurants — didn't seem to be heavily affected. The construction industry lost 64,000 jobs, compared with an average of about 40,000 in the previous three months. Retail employment was flat and the leisure and hospitality industry posted a net gain of 7,000 jobs, the first increase since September.
The unemployment rate, which hasn't risen since October, may be bottoming out. But economists caution that many of the unemployed have given up on their job searches and aren't included in the jobless rate.
Many of those discouraged workers will likely resume looking as the economy improves. As hiring is likely to remain slow, the influx of jobseekers could boost the jobless rate.
When discouraged workers are included, along with those working part-time because they can't find full-time work, the so-called "underemployment" rate rose to 16.8 percent last month from 16.5 percent. That reflects a jump in the number of involuntary part-time workers. The figure is below October's all-time high of 17.4 percent.
Christina Romer, chair of the White House's Council of Economic Advisers, said the report was "consistent with the pattern of stabilization and gradual labor market healing we have been seeing."
One encouraging sign in the report: The number of long-term unemployed — those out of work for six months or more — fell for the first time since November 2008, to 6.1 million from 6.3 million. Still, about 40 percent of the unemployed have been out of work six months or longer.
The average work week dropped to 33.8 hours from 33.9 the previous month. That's a negative sign: Employers are expected to increase the hours for their current employees before hiring new workers.
Still, economists said much of the drop in hours worked was reported by construction workers and likely reflects the impact of bad weather. The department said more than 5 million people worked fewer hours last month because of the snow.
Job losses have moderated sharply in the past year. The economy shed an average of about 700,000 jobs in the first three months of 2009.
New hiring is desperately needed after the worst recession since the 1930s. The economy grew at a 5.9 percent rate in the October-December quarter last year, the fastest pace in six years. But most economists expect the pace of growth to slow to about 3 percent in the current quarter, which won't be fast enough to quickly bring down the jobless rate.
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