Unemployment rises as economy adds only 175K jobs
Beats expectations but doesn't keep up with population growth
The U.S. economy added 175,000 jobs in February, and the unemployment rate climbed to 6.7% as a result of employment not keeping up with population growth, the U.S. Bureau of Labor Statistics reported today.
Employment increased in professional and business services and in wholesale trade but declined in information.
The number of unemployed persons stood at 10.5 million in February, little changed since January.
The jobless rate has shown little movement since December.
"Today’s jobs report finally exceeded expectations, though the bar was quite low given the disappointing jobs picture in the prior two months. Nonfarm payrolls rose 175,000 in February, in line with the 180,000 average monthly gain over the past year," said Doug Duncan, chief economist at Fannie Mae. "Other encouraging details in the report include a total upward revision of 25,000 jobs to December and January, and a 0.4% jump in average hourly earnings. Even the pickup in the unemployment rate had some upside, as it was because more people joined the labor force, a sign of growing confidence in the jobs market.
"Despite disruptive weather during the past two months, the report suggests a modest impact on construction payrolls, which rose 15,000 following a 50,000 gain in January. The strengthening trend in overall hiring and a pickup in earnings should help boost consumer confidence, raising hope for a decent spring selling season. Our February National Housing Survey, to be released next week, is expected to show consumers’ volatile assessment of the housing market in recent months but the underlying trend remains positive for continued housing recovery," Duncan said.
Among the major worker groups, the unemployment rates for adult men (6.4%), adult women (5.9%), teenagers (21.4%), whites (5.8 %), blacks (12%), and Hispanics (8.1%) showed little or no change in February. The jobless rate for Asians was 6%, unchanged over the year.
The number of long-term unemployed (those jobless for 27 weeks or more) increased by 203,000 in February to 3.8 million; these individuals accounted for 37% of the unemployed.
The number of long-term unemployed was down by 901,000 over the year.
Both the civilian labor force participation rate, hovering at historic lows of 63% and the employment-population ratio 58.8%, also at historic lows, were unchanged in February.
The labor force participation rate was down 0.5 percentage point from a year ago, while the employment-population ratio was little changed over the year.
Job growth averaged 189,000 per month over the prior 12 months. At this rate, taking into account population growth, it would take until December of 2018 to return to pre-recession employment levels while also absorbing the people who enter the labor force each month.
Chart: The Hamilton Project, Brookings Institution
In February, job gains occurred in professional and business services and in wholesale trade, while information lost jobs. Employment in professional and business services increased by 79,000 in February. Accounting and bookkeeping services added 16,000 jobs. Employment continued to trend up in temporary help services (+24,000) and in services to buildings and dwellings (+11,000). Over the prior 12 months, professional and business services added an average of 56,000 jobs per month.
Employment in construction changed little (+15,000). Over the past year, construction has added 152,000 jobs. Within the industry, employment in heavy and civil engineering construction rose by 12,000 in February.