Adding 192,000 jobs in February is the first time since the Great Recession that payrolls have seen anything like a normal expansion. But it takes 160,000 jobs or so just to keep up with the natural growth of the labor force, so this is nothing like the 300,000-plus net new jobs we need to be seeing. It also missed expectations of a 200,000 job gain.
Recall that January numbers were kept down by bad weather, so the two-month average is only 128,000. At this rate, it will take until 2019 to return to pre-recession employment levels. Also, low labor force participation, at a 25-year low, is what drove down the unemployment rate. Economist Heidi Shierholz of the Economic Policy Institute comments:
Remarkably, despite payroll job growth over the last year, the labor force is now smaller than it was a year ago (by 312,000 workers), despite the fact that the working-age population grew by 1.9 million. Consequently, the proportion of the population in the labor force — i.e., people who are working or unemployed — dropped by 0.6 percentage points over the same period. This is comparable to the drop in unemployment. If the labor force participation rate had held steady over the last year, there would be roughly 1.5 million more workers in the labor force right now. These workers are instead on the sidelines.
Falling public sector employment, along with the undertone of a vicious attack on public servants and the private sector not picking up the slack, is one factor working against better employment numbers. Another danger: Rising oil prices; I’ll be writing on this in Sunday’s Seattle Times.
So second gear is better than first. But can we shift into third, or even stay in second?
Today’s Econ Haiku:
The rain in Bahrain
Falls mainly on the Saudis
I think we’ve got it