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Economy Added 192,000 Jobs in February

Friday, March 04, 2011

The U.S. job market bounced back in February as the unemployment fell below 9 percent for the first time since April 2009.

The Labor Department reported that 192,000 jobs were created last month. Revisions to the January and December payrolls added 58,000 more jobs than previously calculated.

The increase in February was the largest since May of last year.

"The labor market may not be great just yet but it is firming and that is good news for job seekers.” Said economist Joel Naroff.

The unemployment rate, measured in a separate survey, fell to 8.9 percent. There are now 13.7 million people unemployed.

The results were largely matched the forecasts of economists.

Private-sector hiring drove the increase last month, adding 222,000 jobs.  Hiring was nearly across all sectors including manufacturing (+33,000), professional and business services (+47,000) and health care (+34,000).  Even the construction sector added jobs (+33,000) after a steep drop in January because of severe winter weather.

At the same time, government-sector workers — primarily state and local workers — continued to see payrolls cut.  Last month, they fell by 30,000.

"Good employment report, but not a blockbuster," said Nigel Gault, chief economist at IHS Global.

While the report hints that job growth is on track to continue rising, there are some worrying signs in the report. 

The number of people who cannot find a job despite looking for more than six months made up 44 percent of the unemployed. That number has basically remained unchanged for the past year. The longer a person is out of the work, the harder it is to find a job.

"We have yet to see enough optimism in the job market for those who have become discouraged or marginally attached to the labor force to throw their hats back into the ring and look for jobs," said Diane Swonk, chief economist with Mesirow Financial. 

For those with jobs, the average work week was unchanged and average hourly pay increased by only one cent. Businesses often ask employees to work more or pay them more to meet rising demand before hiring new workers. If these remain flat, employers could feel they have the right staffing level for the time-being.

More troubling for future job growth, rising food and gasoline prices could reduce consumer demand for non-essential goods and at the same time squeeze corporate profit margins. 

"Given the sustained rise in operating costs and the profound lack of clarity how the turmoil in the Middle East will affect future revenues and profits, we would not be surprised if private employers remain cautious about hiring the next several months," wrote Bernard Baumohl, chief global economist for The Economic Outlook Group.

The January jobs report for New York State and New Jersey should be released on Wednesday, March 9.  The February jobs report for the two states is expected the week of March 21.

The national jobs report for March will be released on April 1.

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