The official jobs report was released by the Bureau of Labor Statistics (BLS) Friday showing 175,000 jobs were added to economy in February. This beat expectations. Most analysts had predicted job growth of 150,000 according to a Bloomberg survey. On Wednesday, ADP reported only 139,000 private sector jobs.
In addition, the BLS changed their employment numbers for December revising them up from 75,000 to 84,000, and they changed January from 113,000 to 129,000. With these revisions, employment gains in December and January were 25,000 higher than previously reported.
It is common for the jobs numbers to be revised when actual numbers come in, and usually upward. When the BLS reports artificially low numbers, it tends to dampen the public’s outlook on the economy and that can become a self-fulfilling prophecy.
Even though job growth was better than anticipated, the unemployment rate ticked up to 6.7% because more people began looking for work again which is a good sign. The Bureau of Labor Statistics characterized the unemployment rate as essentially “unchanged.”
The job growth is somewhat surprising because the nation remained in the grips of severe winter storms that kept consumers and construction workers home.
Mark Zandi, chief economist of Moody’s Analytics, said, "February was another soft month for the job market. Employment was weak across a number of industries. Bad winter weather, especially in mid-month, weighed on payrolls. Job growth is expected to improve with warmer temperatures.”
Other economists echoed Mark Zandi:
“Overall, if the economy managed to generate 175,000 new jobs in a month when the weather was so severe, once the weather returns to seasonal norms payrolls employment growth is likely to accelerate further,” Capital Economics’ senior U.S. economist Paul Dales said in a research note according to POLITICO.
Once again, U.S. job numbers are being held down by continued downsizing of the federal government. Austerity budgets since Republicans took control of the House in 2011 have resulted in a hemorrhage of federal workers. In February, the federal government cut 6,000 additional workers, and the Postal Service laid off 6,800. These cuts offset the 11,000 workers hired by state governments and the 8,000 hired by local governments. Many of these jobs were likely due to snow removal.
Despite the bad weather, 15,000 jobs were added in construction last month. Manufacturing continued to grow, although employment in the production of durable goods remained steady. Car sales were impacted by the bad weather, and that may have played a role.
As usual, 140,000 of the 175,000 jobs were in the service sector. Employment in food and leisure increased. This shows consumers have more confidence, and more disposable income. The bad news is that the 21,000 jobs added in that sector tend to be low income jobs.
The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed again this month at 7.2 million. These individuals were working part time because their hours had been cut back or because they were unable to find full-time work. Once again, the data debunks political rhetoric that claims employers are cutting millions of workers’ hours because of Obamacare.
Job growth is sluggish. What is needed to get the economy growing is a program to re-build our decaying infrastructure. Such a program would produce millions of mostly good paying jobs, which in turn would create more demand for the goods and services businesses provide. And, the tax revenue would continue to shrink the deficit. We can hope that the mid-term elections produce a new Congress that believes in investing in America.