Unemployment rate unchanged as 36K jobs lost

WASHINGTON — The 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.

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.

Some economists said the data suggest that the job market is now pointed in the right direction and that the unemployment rate may have peaked. 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.

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 this year — and not until the second half of the year. Gault expects the jobless rate will remain above 9.5 percent by the end of 2010.

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.