The Bureau of Labor Statistics released the February unemployment report this morning, and the results are encouraging: Our economic recovery is continuing. The Bureau estimates that 236,000 jobs were added in February, and that unemployment fell to 12 million, which is a 7.7 percent rate, the lowest since 2008.
This news is encouraging in two ways: The increase in jobs far outstripped previous estimates by American economists. The consensus among the professionals was that about 170,000 jobs would be added. See CNNs survey of economists.
The second reason is that the 236,000 figure is close to what economists estimate as being needed to lower the unemployment rate. About 250,000 new jobs are needed in order to absorb the natural increase in new workers entering the labor force every month. Anything close to that is considered healthy for future growth.
The first chart in the slide show provides a good picture of how the job market has been preforming over the last two years. The bars in the chart represent the change in jobs.
Remember that about 250,000 are needed for a healthy job market. Given the depth of the recession we are still recovering from, anything close to the +250 line is welcome news.
The next graph shows the unemployment rate by month from 2007 through the end of February of this year.
Two things stand out from the unemployment chart:
- First, the collapse of the economy that began just before January of 2008 was exceptionally steep and severe. Unemployment did not stop getting worse until November of 2010 when it hit 10 percent.
- The second is the relative slowness of the fall of unemployment. Everyone would like to see a faster recovery, but that is not likely with a recession as deep as this one.
Deep recessions and depressions need a lot of time for recovery. Too much of the economy was wrecked; too many people were economically devastated. What is left of the business community needs time to sort its finances out.
The good news is the housing market is recovering, banks are better, and manufacturing is doing well for the first time in years; capacity utilization is nearing 80 percent, a healthy level. But a full recovery is more than a year or so away.