- Unemployment rolls increased 233,000
- Unemployment rate increased slightly to 6.7%, from 6.6% in January
- Those “not in the labor force” fell by 93,000
- Participation Rate held steady at 63.0%
- 175,000 payroll jobs were added
- 162,000 were private sector positions
- Small growth seen across most industries, with a few exceptions
- Food Service and Temp jobs saw large gains
- Biggest losses seen among Couriers, Movie/Record Production, and Retail Sales at electronics stores.
So, what does this all mean? Oddly enough, if a full-fledged recovery were underway, the unemployment rate would actually start to increase. Given the anemic job growth since the recession officially ‘ended’, many job seekers gave up looking for work entirely and dropped out of the labor force. The current method of calculating the unemployment does not count those people as unemployed, leaving roughly 1,500,000 million people out of the equation.
As these people feel the hiring market is getting better, they will re-enter the pool and start looking for work again. Once they start looking, they are considered ‘unemployed’ again, driving the unemployment rate up. While the critical Participation Rate held steady this month, (an indicator of people leaving or entering the workforce) it is still fluctuating at 36 year lows.
The upshot is that while it is not bad news in the sense that jobs situation is getting worse; it also does not seem to be getting better. However the leveling off of those ‘not in the labor force’ and the gradual decline of “those not in the labor force, but would like a job” are encouraging signs.
Turning to the Establishment Survey, 175,000 new jobs is a decent number, but not a great one, though it is still ahead of estimate. However, at that rate of job creation, it would take roughly 12 years to get back to full employment.
It is encouraging that the industries experiencing losses are very narrow (say as opposed to construction or durable goods), which indicates problems within the specific industry rather than the economy as a whole.
Looking at the 175,000 new jobs, it is troubling that the 45,600 of them were either at Temp Agencies, or in the Food Service industry. Temp Agency hiring is indicative that companies need capacity, but are unwilling to bring on full time employees permanently, usually due to uncertainty about future economic growth. Food Service on the other hand, tend to be lower paying, non-benefit providing jobs.