There’s good economic news to report: Friday the U.S. Bureau of Labor Statistics announced that the economy added 175,000 jobs in February, an increase from the 129,000 new jobs created in January, a number that was revised upward from its first estimate of 113,000. The unemployment rate ticked up a tenth of point to 6.7 percent because more formerly disheartened job applicants resumed looking for work. Participation in the labor force remained at 63 percent. Average hourly earnings rose by 9 cents to $24.31.
The better-than-expected news came on the heels of data that showed the economy stumbling. January’s retail sales fell 0.4 percent while December’s sales were revised downward from a gain of 2.3 percent to a loss of 0.1 percent. The Bureau of Economic Analysis made a downward revision of fourth quarter 2013 economic growth to 2.4 percent from 3.2, a further slowing from the 4.1 percent growth in the third quarter. Worst, for an economy driven by consumer spending, the Conference Board reported that its Consumer Confidence Index declined in February from 79.4 to 78.1.
Last week Federal Reserve Chair Janet Yellen blamed signs of a weakening economy on unusually harsh winter weather. Some 6.9 million non-agricultural workers who usually work full time, found themselves working part time for extended periods due to storms, while another 600,000 non-agricultural workers missed an entire week of work. The average work week for the month contracted by 0.1 hour to 34.2 hours.
The unemployment rate for adult women at 5.9 percent is lower than for adult men at 6.4 percent. The group with the highest unemployment is teenagers at 21.4 percent followed by blacks at 12 percent, Latinos at 8.1 percent, Asians at 6.0 percent and whites at 5.8 percent.
Jobs by category
Employment in professional and business services increased by 79,000 in February. While wholesale jobs grew by 15,000, mostly in durable goods, retail trade employment fell by 4,000. Jobs increased by 21,000 at food and drinking establishments.
Despite the weather, construction employment rose by 15,000. Some 10,000 people found work in health care. Of these, 8,000 people found work in physicians’ offices, reflecting the stimulating effect of the Affordable Care Act. Motion picture and sound recording jobs took a hit in the month, losing 14,000 jobs.
Upon Friday’s good news, the White House touted that the private sector had now added 8.7 million jobs to the economy over 48 consecutive months of job growth.
Not everything in the report was rosy. Around 10.5 million people, were still unable to find work. And 7.2 million people are still only working part time, despite their desire for full-time work.
The biggest problem that emerged from the jobs report was that the number of long-term unemployed grew by 203,000 to more than 3.8 million, a reversal of the decline the previous two months. To put this number in perspective, in 2007, before the recession, the long-term unemployed numbered only a million.
The long-term unemployed face numerous problems: Nearly half say that being unemployed has strained familial relationships. More than half have put off medical care. They are half as likely as those recently let go, to land a job interview. About 10 percent file for bankruptcy. Close to 40 percent have lost self- respect. Life expectancy even drops. While 12 percent of blacks are unemployed, they make up 23 percent of the long-term unemployed. Those below the poverty line make up more than a third of the long-term unemployed.
The extension of long term unemployment insurance ended December 31. Republicans contend that the winding down of that program would force the long-term unemployed back into the workforce as they accept jobs that they would have turned down otherwise. Instead the reverse has happened.
Friday, the White House reiterated its call to extend unemployment benefits to these workers. President Obama’s position is backed by Nobel Prize winning economist Paul Krugman as a way to create more jobs by injecting cash into the economy. To help ameliorate long-term unemployment, the new Obama 2015 budget proposes funding job-driven workforce training.
With spring soon to remove the threat of snow storms, expect the economy to further improve.
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