Unemployment Holds at 9.7% in February
Job loss and unemployment rates held steady in February, but early signs of wage growth point toward potential financial stability growing among employed US workers. Meanwhile, the mortgage industry is looking to help those unemployed who are also responsible for mortgage payments. The economy lost 36,000 jobs in February and the unemployment rate held at 9.7%, according to the Labor Department’s Bureau of Labor Statistics monthly report (download here). The 9.7% unemployment rate is steady from January, but up from February 2009’s rate of 8.2%. The U-6 unemployment rate, which includes not only those without jobs, but also the underemployed, was 16.8% in February, up from 16.5% in January, but down from December’s 17.3%. A year ago, the U-6 unemployment rate was 15%. The monthly job loss figure tops early estimates by California-based TrimTabs Investment Research that the US economy lost 30,000 jobs in February, based on daily income tax withholding. Despite the drop in jobs, year-over-year average hourly earnings increased 1.9%, according to the Labor Department, a sign that employee wages are on the rise. TrimTabs also found income tax withholding on more than 130m salaried US workers grew 0.7% from February 2008 to February 2009 - the first positive year-over-year growth since November 2008. This data, which the firm uses to estimate growth in income among US workers, looks even better from the first few business days of March, according to a TrimTabs spokesperson. "One of the things we fear is the [mortgage] default rate is high," a spokesperson told HousingWire. "Money is being poured into the economy. Wages are increasing but we're not sure how long this will continue." The continued high unemployment rate seems particularly relevant in light of a recent proposal by the Mortgage Bankers Association (MBA) to forbear on the mortgages of involuntarily unemployed borrowers. The MBA suggested adding a series of forbearance “phases” to the process under the Home Affordable Modification Program (HAMP) for borrowers that involuntarily lose their jobs. The proposal to forbear on unemployed homeowners – although spurring industry criticism – would mark an industry movement toward giving more aid to the unemployed. “Today's numbers underscore that we still have work to do before we can be sure that all Americans have access to good jobs,” said Labor Department secretary Hilda Solis. “Today's report also shows positive signs that the economy is moving in the right direction. For example, we see continued growth in employment in the health care and manufacturing sectors.” The Labor Department said nonfarm payrolls totaled 129.5m in February and job losses were concentrated in construction and information, while temporary help services added jobs. Construction employment fell by 64,000 jobs, including 10,000 lost jobs in nonresidential building. The information industry lost 18,000 jobs. The temporary help services sector gained 48,000 jobs. February’s harsh winter weather may have affected payroll employment and hours, including total hours worked declining 0.6%, but the department said it is not possible to quantify the net impact of the winter storms on these measures. Total real estate jobs were down 2,300 and the securities, commodity contracts and investments sector lost 2,500 jobs. Write to Austin Kilgore.