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US lost -36,000 jobs in February; Broad level of unemployment rose to 16.8%; 41% of jobless unemployed for more than 6 months
By Finfacts Team
Mar 5, 2010 - 1:18:12 PM
Nonfarm payroll US employment was little changed (-36,000) in February, and the unemployment rate held at 9.7%, the U.S. Bureau of Labor Statistics reported today. Employment fell in construction and information, while temporary help services added jobs. Severe winter weather in parts of the country may have affected payroll employment and hours; however, it is not possible to quantify precisely the net impact of the winter storms on these measures. The broad measure of unemployment rose to 16.8% and 41% of the jobless were unemployed for more than 6 months.
In February, the number of unemployed persons, at 14.9 million, was essentially unchanged, and the unemployment rate remained at 9.7%. Among the major worker groups, the unemployment rates for adult men (10.0%), adult women (8.0%), whites (8.8%), blacks (15.8%), Hispanics (12.4%), and teenagers (25.0 %) showed little to no change in February. The jobless rate for Asians was 8.4%, not seasonally adjusted.
John Authers of the FT said today that this report could be a classic. The employment picture is finely balanced, but clouded by snow and by the need to take a count of Americans. He says the north-eastern US has had a terrible winter. Thus seasonal effects could keep payrolls much lower than forecasters, working only with economic variables, had been predicting. But there is another one-off effect, as workers are hired to help carry out the national census, which happens once each decade. This is also hard for economists to model.
Some 41% of the unemployed have been jobless for at least six months while the broad measure of unemployment rose from 16.5% in January to 16.8% in February.
The number of persons working part time for economic reasons (sometimes referred to as involuntary part-time workers) increased from 8.3 to 8.8 million in February, partially offsetting a large decrease in the prior month. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.
About 2.5 million persons were marginally attached to the labor force in February, an increase of 476,000 from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.
Decoding the employment numbers, with CNBC's Diana Olick; Mark Zandi, Moody's Economy.com; David Malpass, Encima Global; Robert Barbera, ITG; and CNBC's Steve Liesman:
Among the marginally attached, there were 1.2 million discouraged workers in February, up by 473,000 from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.3 million persons marginally attached to the labor force had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities.
Insight on the latest employment numbers, with Bill Gross, founder of the multi-billion dollar bond fund manager PIMCO:
Prof. Peter Morici of the University of Maryland commented: "The Labor Department reported the economy shed 36,000 jobs in February and the unemployment rate held 9.7%. Counting workers compelled to work part time for lack of full time opportunities and discouraged workers that have quit looking, the unemployment rate rose to 16.8%.
Continuing job losses indicate President Obama’s stimulus spending and support for the banks have failed to turn the economy around. In an economic recovery, jobs are a lagging indicator, not a never indicator.
Eight months into the much touted recovery, the economy should be adding jobs not losing jobs at a slower pace. No study of economic history could yield a conclusion other than that the U.S. economy walls along the precipice of a double dip recession.
To add jobs, businesses need customers and capital. Businesses lack customers because of the yawning trade deficit with China, and capital because the Bush-Obama bank bailout enriched Wall Street financiers without fixing the problems of the 8,000 regional banks that do the tough lending.
Nearly all the sustainable GDP growth accomplished in the second half of 2009—GDP growth less adjustments for inventory changes--went into the pockets of Wall Street bankers as bonuses.
When dollars leave the United States to purchase imports and do not return to purchase exports, Americans cannot sell all they make—be it manufacturers, software makers, movie producers, or clean shirts from the corner laundry.
From 2005 to 2008, by consuming more than they produced and earned, through excessive foreign borrowing, Americans sustained a false prosperity with a trade deficit in excess of 5% of GDP. That line of credit has run out, and either Americans balance their trade accounts or reconcile to slow growth, no jobs and economic decline.
Stimulus spending and subsidies for Wall Street financiers are palliatives—more accurately, an ice pack for the hangover from the Bush years of heavy borrowing, and shabby financial practices that began with Enron and continue at Goldman Sachs today, through shameful tactics such financial engineering to cover up Greece’s financial blight to selling of mortgage backed securities to investors while it shorts the market.
Regional banks have not benefited from the TARP, which was intended to create an elaborate analog to the Savings and Loan Crisis Resolution Trust Corporation. Instead, the 8,000 regional banks lack money to lend businesses.
No customers, no capital, no jobs
Failing to address root causes of economic malaise invites decline.
President Obama and speaker Nancy Pelosi obsess about income redistribution in every piece of legislation, ranging from health care reforms to road construction.
A just distribution of wealth is a noble goal, but there must be wealth to distribute.
The American economy is at sea. Without rudder or compass, America navigates an iceberg field while the ships’ captain and pilot focus on a well stocked bar, lest the passengers become aware of their imminent peril."
