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Politics & Money

Job growth sparks very cautious optimism

Unemployment rates fell in 45 states and the District of Columbia in January, but economic forecasters remain cautious making it hard to predict the economy’s trajectory.

A new report from the U.S. Bureau of Labor Statistics on Tuesday said regional and state unemployment rates trended lower in January, with only New York posting an uptick in unemployment.

Nationally, the U.S. added 227,000 jobs in February, but not enough to lower the current 8.3% unemployment rate, according to the BLS’ March 9 jobless report.

James Frischling, president and co-founder of NewOak Capital, said long-term unemployment remains a problem with no clear end in sight. 

“While the number of weeks for the long-term unemployed moved lower to 40, economists are worried that the number of people left behind as a result of those being out of work for more than 27 weeks make up over 40% of the unemployed population.”

Others are feeling a bit more postive, yet still restrained.

The recent sustained run of stronger economic data, particularly in the labor market, persuaded Capital Economics on Monday to raise its forecast for gross domestic product growth to 2% this year, from 1.5%.

“We are also nudging up our 2013 growth forecast to 2.5%, from 2%. But despite these revisions, we still think the Fed will fulfill its conditional commitment to leave short-term interest rates near zero until at least late 2014.”

The BLS reported that significant employment growth month-over-month occurred in Texas in January, with the state adding 67,200 jobs. The Bureau of Labor Statistics also noted hiring pick ups in New York (44,600 jobs) and Ohio (32,800 jobs).

The steepest month-over-month employment drops occurred in Florida (38,600 job losses); Pennsylvania (9,000 jobs lost); and the District of Columbia (6,100 job losses).

As far as job openings, the country had 3.5 million positions open in December, which is 45% higher than June 2009 recessionary levels while still below the 4.3 million openings that existed prior to the recession.

The layoff and job dismissal rate remained unchanged in January with total layoffs hitting 1.6 million, down from 2.1 million at the peak of the recession, BLS said. The new hire rate also remained mostly unchanged at 3.1%, or 4.2 million hires, in January.

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