Nonfarm payroll employment was little changed (-36,000) in February, and the unemployment rate held at 9.7 percent, the U.S. Bureau of Labor Statistics reported today. Employment fell in construction and information, while temporary help services added jobs. Severe winter weather in parts of the country may have affected payroll employment and hours; however, it is not possible to quantify precisely the net impact of the winter storms on these measures.
There were no huge surprises in this report. One thing to keep in mind is that the government is currently hiring a record number of Census workers. 15,000 census workers were hired in January, and the government plans to hire over 1 million temporary census workers over the next couple of months. So a temporary boost in employment in the next couple of months can be expected.
While the Federal government is adding temporary jobs, states and local governments are continuing to shed jobs. 25,000 state and local jobs were lost in January. With budget crises in states reaching a crescendo, expect public sector unemployment to increase.
Keep in mind that we have shed about 8.5 million jobs in this recession and that we must start adding jobs on a consistent basis to experience an economic recovery. We are far from a recovery, and the longer we remain in a weak labor environment, the greater chance we have of experiencing what will seem like a sudden drop in economic activity.
Part-Time Workers for Economic Reasons
The number of individuals working part-time for economic reasons increased by 475,000 to nearly 8.8 million. This follows a January report which saw a substantial dip in the number of people working part-time for economic reasons. This suggest the labor environment is still weak, and that firms are still very hesitant to bring on full-time workers.
U-6 Unemployment Rate
The U-6 unemployment rate, which is the broadest measure of unemployment, rose to 16.8% in February from 16.5% in January. In each of the previous 2 recessions, we never maintained a 10% U-6 rate for more than 11 months. In the current recession, we have seen double-digit U-6 rates for 21 months. This is not good for the prospects of an economic recovery.
I am seeing very little evidence that suggests we are experiencing an economic recovery. We will likely muddle along the first half of 2010 before really seeing some fireworks in the 2nd half of the year into 2011.
