WASHINGTON – A better-than-expected jobs report from the Labor Department on Friday added to a list of indicators that the U.S. economy is healing, but employment growth strong enough to reduce the jobless rate remains months away.
News that the unemployment rate held steady at 9.7 percent and employers shed only 36,000 jobs on net in February came as a relatively pleasant surprise. Analysts had expected much worse owing to the miserable winter weather across much of the nation last month.
“Now, this is actually better than expected, considering the severe storms all along the East Coast are estimated to have had a depressing effect on the numbers. And it shows that the measures that we’re taking to turn our economy around are having some impact,” President Barack Obama said of the job numbers. “But even though it’s better than expected, it’s more than we should tolerate.”
The Labor Department report issued Friday cheered Wall Street. The Dow Jones surged 122 points, or about 1.2 percent.
On balance, Friday’s data point to a transition that’s under way from employers shedding jobs to what the Obama administration hopes will be a steady net gain in jobs starting this month.
Some analysts expect that to happen.
“We have to conclude that this is a fairly strong employment report and that we will see a significant increase in employment and hours worked in the March release,” forecaster RDQ Economics said Friday in a research note.
“The job market will look much better this spring as the Census (Bureau) ramps up hiring for the 2010 census. Several hundred thousand temp jobs will be created between March and May. The real test for the job market will come this summer and fall when the census temp jobs end,” said Mark Zandi, the chief economist for forecaster Moody’s Economy.com. “If private businesses haven’t begun to hire by that time, then the job market will weaken again.”
While Friday’s headline numbers remained slightly negative, the report offered some mildly positive signs. Manufacturers added jobs for the second straight month, albeit not many, around 1,000.
“Of the 21 manufacturing industries, more than half (13) reported modest gains, totaling 19,300 jobs. These increases were largely offset by declines in seven industries, led by motor vehicle employment,” David Huether, the chief economist for the National Association of Manufacturers, wrote Friday in his blog Shopfloor.
More comforting was the services sector, which added 42,000 jobs, and professional and business services employment, which increased by 51,000. This shows momentum building in a vital sector.
On the downside, 64,000 construction jobs were lost, as were 60,000 jobs tied to goods production. Government employment was down 18,000 as revenue-strained state and local governments stepped up layoffs.