I’ve been writing a lot lately about the weak jobs picture being a real drag on the economy, both in economic and social terms. It has been the “fly in the ointment” of an otherwise decent economic recovery, but nothing sustainable would occur without the employment picture improving dramatically. However, optimists got a nice treat in the form of a strong February jobs report. Let’s dig into it a bit more.
Strong Growth
The headline number showed a gain of 192,000 jobs created which was actually pretty close to what the economists predicted. That won’t happen very often so enjoy it while you can. The unemployment rate dipped down to 8.9%. I like the fact that it actually went down when there were jobs being created as opposed to last month when it plunged 0.4%, even though there were hardly any jobs added. Another positive nugget was the fact that December and January were revised up by 58,000 jobs. Employment tallies are in imperfect science so it is important to pay attention to the revisions.
This was the most jobs added since last May when there was an artificial boost due to the hiring of census workers. I love the fact that the private sector was robust in February, gaining 222,000 jobs. The private sector is the growth engine and only hires when demand is strong, as opposed to the government which can hire whenever it wants.
One Negative
The Labor Force Participation Rate is at a 27-year low. This is an important metric because it should how many people are actually in the labor force compared to the adult population as a whole. It is the essence of the unemployment rate. We need more people in the labor force, and fewer folks feeling “discouraged” enough to stop looking for work.
Also the U6, which in my opinion is the more important unemployment rate is still lofty at 15.9%. This number includes discouraged workers and people who are “underemployed” as well. The economy would be in business if this number started to meaningfully drop. It has inched down lately, but it is still way too high for anybody’s liking.
The bottom line is that there is a lot to like in this report, but the economy sorely needs a string of these and not just one here and there. Even the bears have to admit that this was a nice start.
February Employment Report Finally Creates Optimism is an article from: 
