Friday, March 05, 2010
All the talk about the severe winter weather grossly distorting the monthly labor report turned out to be just that - talk - as both nonfarm payrolls and the unemployment rate were surprisingly tame during the month of February.
Due largely to a decline in construction jobs, nonfarm payrolls fell by 36,000 in February after declines of 109,000 in December and 26,000 in January. There were total upward revisions of 35,000 for prior months' data, the December total adjusted up from -150,000 and the January job losses slightly greater than the originally reported -20,000.
Turning to the establishment survey, the unemployment rate held steady at 9.7 percent as the ranks of the unemployed increased, but at a slower rate than the workforce grew.
The number of respondents working part-time instead of full-time rose from 8.3 million to 8.8 million and the broader U-6 measure of under-employment (including this group along with discouraged workers) rose from 16.5 percent in January to 16.8 percent in February. This comes after reaching an all-time high of 17.4 percent last October.
By category, changes to nonfarm payrolls were dominated by the loss of 61,000 positions in construction and a gain of 51,000 jobs in professional and business services, the vast majority of which were temporary jobs. Importantly, steady increases in temporary positions are often a precursor to hiring for permanent positions.
Education and health care services added their typical 32,000 jobs, however, government payrolls fell by 18,000, paced by a decline of 31,000 at the local level, about three-fourths of these job losses coming in education.
Census hiring has yet to show up in any substantive way as Federal government payrolls (excluding the U.S. Post Office) saw an increase of just 16,000. It is expected that more than a million workers will be hired in the months ahead to conduct the 2010 Census.
Interestingly, the impact of the many warnings over the past week about horrific jobs numbers that could have been reported a short time ago have contributed to a tremendous amount of enthusiasm in financial markets - judging by how prices for stocks and commodities are now rising, you'd think that a quarter of a million jobs were just added.