February saw the national unemployment rate decrease from 7.9% to 7.7% with the Establishment Survey Data showing 236,000 jobs added over the month. Looking further into the data there are a few signs of growth but there are some discouraging ones as well.
The Good News:
Establishment Data shows 236,000 jobs added-
Economists generally agree that roughly 150,000 jobs need to be created every month just to keep up with the natural growth in population. With 236,000 jobs created in February, it means actual improvement was made in reducing the number of unemployed, rather than just enough jobs being created to tread water. However, one data point does not a trend make. While adding 236,000 jobs is an encouraging sign, it does not mean that a true recovery is under way.
Sectors seeing the biggest gains were Retail Sale: +23.7k, Information: +20k, and Health Care and Social Assistance: +39.1k.
The Bad News:
Workforce Participation Rate Dropped to 63.5
The workforce participation rate, which measures the percentage of the total civilian labor force in the workforce, dropped from 63.6 to 63.5, continuing a streak of record lows. The hallmark of this economic downturn has been the millions of people leaving the workforce, depressing this indicator. If a full recovery were underway, this number would be increasing, not decreasing, as those who have left, seeing their employment prospects brighten, return to the workforce.
Those ‘Not in the Labor Force, but Want a Job’ Jumps by 190,000
Like the Work Force Participation Rate, the total number of those Not in the Labor Force is a good metric to gauge worker confidence in the labor market. Granted, the entire 300,000 drop seen last month isn’t due to economic discouragement, but the fact that unemployment dipped by the same number seems to indicate that there is still a widespread and genuine concern over job prospects. The BLS also tracks those ‘Not in the Labor Force, but Would Like a Job’ which jumped by 190,000. This data point gives a better idea of the number who have left the workforce for economic reasons, rather than by choice.
The Real Unemployment Rate, Calculated to Count Those Who Left the Workforce: 9.0% (unchanged) Click here to see methodology.