After months of disappointing figures, February met expectations for employment gains, adding 192,000 jobs, the Labor Department reported. But while job seekers may see any upward trend as reason to celebrate, economists cautioned the job market still has a long way to go in this recovery.
"This feels good, but it's really not getting at the problem yet," says Al Angrisani, former Assistant Secretary of Labor, who now works with distressed companies. "We're not creating enough jobs to really drive a long-term reduction in the unemployment rate."
February's unemployment rate came in at 8.9 percent, a slight drop from the previous month's 9 percent. Economists say that number is misleading though, and may increase again before dropping significantly. It reflects a high number of discouraged workers, or people who have given up on looking for work, in addition to some job seekers landing positions.
Job gains in February clustered in manufacturing, which saw an increase of 33,000; professional and business services, which added 47,000 jobs; and health care, which benefited from 34,000 new jobs. During the last year, the health care sector has consistently added jobs, gaining an average of 22,000 each month.
Construction employment also grew by 33,000 in February, but that follows a 22,000 drop the previous month, which may have been at least partly due to harsh winter weather that disrupted hiring. Severe snowstorms were blamed for overall poor growth in January, and economists say some of the February gains this month are essentially making up for jobs we didn't add in January because of that weather.
Economists focused on one number in particular that offers reason for optimism: 222,000 new jobs in the private sector. And the Department made positive revisions to overall figures from the last two months, boosting January's gain to 63,000 jobs rather than the originally reported 36,000, and December's gain to 152,000 jobs, up from 121,000.
"The sentiment is improving; the trend's improving," says Tig Gilliam, CEO of Adecco Group North America, a global recruitment firm. "[But] it's going to be a couple of years, even with a reasonably strong recovering job market, to get back to even an 8 percent unemployment level."
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To put this all into perspective, recall how many jobs the economy lost during the end of 2008 and early 2009: 600,000-800,000 each month. When you consider that, a gain of 200,000 jobs is a drop in the bucket, especially when population growth is taken into account.
And yet, job growth of nearly 200,000 is better than what we've seen in previous months. "We're starting to see a bit of a turn here," says Michael Darda, chief economist and chief market strategist at MKM Partners, an equity research firm. He put out a report this week called "A Critical Mass of Labor Indicators Have Turned," looking at recent positive signs from three indicators: first-time jobless claims; Automatic Data Processing, Inc.'s employment report, known as the ADP report, which focuses on the private sector; and the ISM indexes, a survey by the Institute for Supply Management that tracks manufacturing and service jobs. "[They're] all showing the labor market picking up some momentum, which is encouraging and hopeful," Darda says.
Several online job boards reported increases as well, indicators that are more forward-looking than the Labor Department's employment report because they consider job openings rather than new hires. "We're seeing the number of jobs openings nearing pre-recession levels," says Daniel Greenberg, chief marketing officer at SimplyHired.com, a job-listings aggregator.