Diane Swonk, Chief Economist
Mar. 5, 2010 – 8:00 a.m. CT
Employment Better Than Expected in February
Payroll employment declined by 36,000 in February – not statistically much different from zero, and significantly less than expected, given the rise in unemployment claims during the height of the winter storms. Indeed, the Department of Labor essentially punted on the effect of winter storms, saying that they really couldn't figure out what has been the real impact.
A pickup in temporary hires bodes well for more permanent hires later in the year, as employers tend to dip their toes into the pool of hiring via "temps." Indeed, many temps are now working on plant floors, reflecting recent gains in industrial production.
In more mixed news, the household survey that measures unemployment showed that the unemployment rate held steady at 9.7%, but the number of people working part-time for economic reasons (because they couldn't get full-time employment) and discouraged workers (those who have given up entirely) continued to rise. More than one million workers have stopped looking for a job altogether.
The Bottom Line: "Less bad" is now "good," and labor markets are clearly in the process of stabilizing. Employment will easily move back into the black in March and April as census workers are brought onto government payrolls. It is hardly a vote of confidence on the economy, however, when the best we can hope for in the near-term is a surge in temporary census jobs. Those on the sidelines, in particular, are going to remain a concern and may be the greatest hurdle to a stronger and better-feeling recovery for some time to come.
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