March 9, 2012
CHRISTOPHER S. RUGABER
AP Economics Writer
WASHINGTON — The United States added 227,000 jobs in February in the latest display of the economic recovery’s surprising breadth and brawn. The country has put together the strongest three months of pure job growth since the Great Recession.
The unemployment rate stayed at 8.3 percent. It was the first time in six months it didn’t fall, and that was because a half-million Americans, perhaps finally seeing hope in the economy, started looking for work.
The Labor Department also said Friday that December and January, already two of the best months for jobs since the recession, were even stronger than first estimated. It added 41,000 jobs to its total for January and 20,000 for December.
Economists were expecting February job growth of 210,000.
“It’s a very strong report,” said Bob Baur, chief global economist at Principal Global Investors, an asset management company. “I could hardly find anything not to like in it.”
Since the beginning of December, the country has added 734,000 jobs. The only three-month stretch that was better since the recession ended was March through May 2010, when the government was hiring tens of thousands of temporary workers for the census.
Stocks rose steadily through the morning. The Dow Jones industrial average climbed 48 points to 12,956. Last week, it closed above 13,000 for the first time since May 2008, four months before the financial crisis.
The improving jobs picture figures to improve the re-election chances for President Barack Obama and to complicate the political strategy for the Republicans competing for the right to replace him.
Obama on Friday visited a manufacturing plant run by Rolls-Royce, a maker of aircraft engines, in Virginia, a state expected to be closely contested in November. He told workers there that American manufacturing is adding jobs for the first time since the 1990s.
“The economy is getting stronger,” the president said. “When I come to places like this and I see the work that’s being done, it gives me confidence there are better days ahead. I would bet on American workers and American know-how any day of the week.”
Mitt Romney, the leader in delegates among Obama’s would-be challengers, did not directly address the fresh economic data at a stop in Mississippi, but he criticized Obama for failing to bring the unemployment rate below 8 percent.
The unemployment rate has remained above 8 percent since February 2009, a month after Obama’s inauguration, a point regularly hammered by Romney. But as more jobs are created, it is increasingly likely that the rate will fall below 8 percent by Election Day.
Matt McDonald, a partner at Hamilton Place Strategies and former Bush White House official, calculates that the economy needs to add about 185,000 jobs per month to get to that point.
“It will be a photo finish to get below 8,” he said.
Hiring in February was broad-based and improved in both high-paying and low-paying industries. Manufacturing, mining and professional services all added jobs.
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 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. Manufacturing payrolls are the highest since April 2009.
The government uses a survey of payrolls to determine how many jobs are added or lost each month. That is the survey that produced the 277,000 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 that up because it detects small business hiring.
Over the past three months, the number of employed people has risen by 1.45 million, the biggest three-month gain since March 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. If you don’t have a job and aren’t looking, you’re not part of the work force, and the government doesn’t count you 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.
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, suggesting people were simply giving up looking for work.
A catchall measure of the 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 unemployment claims, the best measure of the pace of layoffs, have averaged 355,000 a week, near a four-year low.
The service sector, which accounts for most jobs in the United States, is expanding faster, according to a private survey this week. The industries of mining, educational services, transportation and warehousing are particularly strong.
Some companies have to hire because they can’t squeeze any more work from their employees. Worker productivity rose last year at its slowest pace in a generation, suggesting companies will have to hire to meet growing demand.
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.