Strong 3 months of hiring as US adds 277,000 jobs

By Christopher S. Rugaber

Associated Press

Published: Friday, March 9 2012 4:03 p.m. MST

And government — federal, state and local — cut only 6,000 jobs in February and a revised 1,000 in January. Last year, government cut an average of 22,000 jobs a month, taking some of the economic punch out of job creation in the private sector.

The small government losses meant the private sector added 233,000 jobs in February.

In all, 142.1 million Americans reported that they had a job in February, the highest since January 2009, during the depths of the recession. The low was 138 million, in December 2009.

The government uses a survey of mostly large businesses and government agencies to determine how many jobs are added or lost each month. That is the survey that produced the 227,000 number. But the payroll survey tends to undercount small businesses and does not count the self-employed.

It uses a separate survey of American households to calculate the unemployment rate. That survey picks up hiring by companies of all sizes, including small businesses, companies being started, farm workers and the self-employed.

The household survey found that 428,000 more Americans reported having a job in February. When the economy is improving, many economists say, the household survey does the better job of picking it up because it detects small business hiring.

Over the past three months, the household survey has shown that the number of employed people has risen by 1.45 million, the biggest three-month gain since 2000.

Normally the gain of 428,000 in February would lower the unemployment rate. But a long-awaited trend is emerging to offset: Unemployed people who had given up looking for a job have started looking again.

The work force consists of those with a job and those looking for one. People who aren't looking aren't part of the work force, and the government doesn't count them as unemployed.

News that the economy is starting to perk up has caused many of those "discouraged workers" to start looking again. They're still unemployed, but they're back in the work force. The work force surged by 476,000 in February and almost 1 million the past two months.

There are still about a million discouraged workers in the United States. Workers are no longer counted as discouraged if they haven't looked in the past year.

The gains produce something of a paradox: If the work force keeps growing because more people are confident enough to look for a job, the unemployment rate won't decline as quickly.

The labor force participation rate, which measures how many adults are working or looking for work as a share of the adult population, rose in February for the first time since last August.

The rate came in at 63.9 percent, up from 63.7 in January, the lowest since 1983. It had fallen gradually for two years — even after the worst layoffs of the recession were finished, as people continued to give up looking for work.

A measure of all unemployed and the so-called underemployed — people who are working part-time but would rather by working full-time — fell to 14.9 percent, the lowest the three years.

That figure includes three groups: the part-time workers who want full-time work, people who are unemployed and looking for work and people who are unemployed and have stopped looking.

Other economic indicators have improved markedly in recent weeks. Consumer confidence in February was the highest in a year, and applications for unemployment benefits, the best measure of the pace of layoffs, have averaged 355,000 a week, near a four-year low.

Wages are still rising only modestly. Average hourly pay increased by 3 cents in February to $23.31. In the past year, it has gone up only 1.9 percent, trailing the rate of inflation.

The factors restraining the U.S. economy seem to be easing, or at least less damaging than they used to be. Greece has struck a deal to get an international bailout and avoid a default later this month that could have rattled the world financial system.

And while the price of gas has crept up almost every day for a month, and is the highest on record for this time of year, that has less of a bite when the economy is growing and people feel more confident.

Another strong month of hiring makes it less likely that the Federal Reserve will take additional steps to help the economy at its meeting next week.

But it makes it more likely that the economy can continue a pattern known as a virtuous cycle — a reinforcing loop in which stronger hiring leads to more consumer spending, which leads to even more hiring and spending.

"Overall, another very strong payroll report and there's every chance that March will bring more of the same," said Paul Ashworth, chief U.S. economist with Capital Economics, an economic research company.

Tony Winton of AP Television News contributed to this report.

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