Unemployment Holds Steady As Jobs Growth Appears Near

9.7 percent and holding steady. Net job loss in February 2010: 36,000. Net job loss in February 2009: 726,000.

BLS data for FebThat’s the top line of the monthly Labor Department’s employment numbers for February. The results surprised most economists who had been expecting a higher job loss because of the snowstorms that crippled big parts of the U.S. last month.

The good news, according to a Wall Street Journal analysis, is that but for the weather, the numbers would have shown an increase in jobs during the month. Citing Morgan Stanley economist David Greenlaw, the Journal says, “payrolls would’ve increased sharply last month — and would be expected to show strong growth in the March (employment) report.”

So take that you naysayers and prophets of doom. The U.S. may not exactly be booming, but it appears those predictions of job growth in the second quarter of 2010 are spot on.

Americans, however, aren’t feeling the same confidence that economists and labor analysts are. Consumer confidence, as measured by The Conference Board, dropped precipitously in February, free-falling from 56.5 in January to 46 in February. The last time the venerable index took that big a plunge was in February a year ago, when it dropped 12 points to 25.3.

There are all sorts of explanations for the plunge after three months of steady, if slow increases. Chief among them is the outlook for employment.

“Concerns about current business conditions and the job market pushed the Present Situation Index (one of the elements used to calculate the confidence index) down to its lowest level in 27 years. Consumers’ short-term outlook also took a turn for the worse, with fewer consumers anticipating an improvement in business conditions and the job market over the next six months. Consumers also remain extremely pessimistic about their income prospects,” said the Board’s Lynn Franco, director of its Consumer Research Center.

This morning’s numbers from the U.S. Bureau of Labor Statistics provide some explanation for American’s pessimism. Of the 14.9 million unemployed, 40 percent have been out of work for seven months or more. When you add in the 2.5 million people out of work, but not counted as unemployed because they gave up, and the 8.8 million (an increase of 700,000 from January) who are working part-time because they can’t find a full time job, then the full effect of the recession becomes apparent.

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Together, those numbers add up to 26.2 million Americans who are out-of-work or underemployed. And those are only the official numbers.

For those with jobs, the BLS says the average per hour wage was $22.46, an increase of 1.9 percent in the last 12 months.  Overtime hours and total weekly hours worked declined during the month.

Now, instead of closing on that sour note, look at the stats for temporary workers: February showed a gain in that sector of 47,500 jobs. The 2.009 million temp jobs during the month was particularly good news, since it is a gain of 76,000 jobs over the 1.933 million temp jobs in February 2009.

Like the robin, increases in temp jobs is considered a harbinger of permanent hiring to come.

John Zappe is the editor of TLNT.com and a contributing editor of ERE.net. John was a newspaper reporter and editor until his geek gene lead him to launch his first website in 1994. He developed and managed online newspaper employment sites and sold advertising services to recruiters and employers. Before joining ERE Media in 2006, John was a senior consultant and analyst with Advanced Interactive Media and previously was Vice President of Digital Media for the Los Angeles Newspaper Group.

Besides writing for ERE, John consults with staffing firms and employment agencies, providing content and managing their social media programs. He also works with organizations and businesses to assist with audience development and marketing. In his spare time  he can be found hiking in the California mountains or competing in canine agility and obedience competitions.

You can contact him here.


3 Comments on “Unemployment Holds Steady As Jobs Growth Appears Near

  1. SHRM surveyed 1000 HR Managers and released a report this morning showing that they expect March 2010 hiring to rise, compared with one year ago.

    I’m not sure how much news there is here considering just how bad things were a year ago, but it’s another piece of data in the right direction.

  2. YAY! So, it’s back to “the War for Talent” and us turning down multiple $100+/hr recruiting contracts?

    I have read(http://news.yahoo.com/s/ap/20100305/ap_on_bi_go_ec_fi/us_economy) that ~8.4M jobs have been lost since the beginning of the Great Recession. If we lose no more and start creating 175k net jobs/mo., it will take us 4 years to get back to where we were (and that doesn’t take into account any growth in the eligible labor force).

    Here are some educated estimates for your consideration:

    Macroeconomic Forecasts last updated: 02/22/2010

    Surv. of Prof. Forecasters (Feb) Wells Fargo (Feb) WSJ (Feb) Fed (Jan) CBO (Jan) OMB (Feb)
    economic growth, 2010 3% 2.9% 3% 2.8 to 3.5% 2.1% 3%
    economic growth, 2011 2.9% 2.4% 3.4 to 4.5% 2.4% 4.3%
    (end of 2010) 9.7% 10.1% 9.4% 9.5 to 9.7% 10% 9.8%
    unemployment, 2011 9.2% (annual average) 9.4% 8.2 to 8.5% 9.1% 8.9%
    core inflation, 2010 1.3% 1.2% 1.9% (overall) 1.1 to 1.7% 1% 1.3% (overall)
    core inflation, 2011 1.5% 1.7% 1 to 1.9% 0.9% 1.7%

    Recent Forecasts

    NABE consensus forecast: February 2010 (CNBC): unemployment = 9.6% by end of 2010;
    economic growth = 3.1% in 2010, 3.2% in 2011; core PCE inflation rises 1.5% in 2010, 1.7% in 2011; fed funds rate rises to 0.75% in fourth quarter 2010

    Fed Forecast as of Jan 2010: economic growth = 2.8% to 3.5% in 2010 and 3.4 to 4.5% in 2011 (note: these are from 4th quarter to 4th quarter while other forecasts compare yearly averages);
    unemployment rate = 9.5 to 9.7% in 2010 and 8.2 to 8.5% in 2011 (estimates are for 4th quarter of the respective year); natural rate of unemployment = 5 to 5.2% (range = 4.8 to 6.3%); inflation as measured by core PCE index of 1.1% to 1.7% in 2010 and 1 to 1.9% in 2011

    Survey of Professional Forecasters (latest survey February 2010): economic growth = 3% in 2010, 2.9% in 2011; core inflation (PCE) = 1.3% in 2010 and 1.5% in 2011 (overall PCE inflation = 1.1% in 2009, 1.7% in 2010, 2.1% in 2011); unemployment rate =9.7% in fourth quarter 2010; average unemployment rate = 9.2% in 2011, 8.3% in 2012

    Wells Fargo Securities Economic Forecast (latest forecast: Feb 2010): economic growth 3.7% in first quarter of 2010, 2.9% in 2010 and 2.4% in 2011; core PCE inflation = 1.2% in 2010 and 1.7% in 2011;
    unemployment rate rising to 10.2% in the third quarter of 2010; declining to 9.4% in the fourth quarter of 2011 (slow job creation beginning first quarter 2010; job growth of 100,000+ per month begins in fourth quarter)

    Economic forecasting survey, February 2010 (WSJ): economic growth = 3% in 2010;
    unemployment at 9.4% at end of 2010; inflation = 1.9% in 2010

    Reuters (Feb 9): economic growth = 2.7% in first quarter, 2.9% for 2010; core inflation = 1.4% in 2010, 1.5% in 2011; Fed starts to raise rates in third quarter, ending 2010 at 0.75%

    OMB (Feb 1, 2010 – see p7): economic growth (end of year comparisons) = 3% in 2010, 4.3% in 2010;
    unemployment = 9.8% in 2010, 8.9% in 2011; inflation = 1.3% in 2010, 1.7% in 2011; natural rate of unemployment = 5.2%, growth in potential GDP = 2.5%

    CBO (Jan 2010): note – assumes all Bush tax cuts expire and other policy changes that are unlikely (need to make forecast assuming current policy; results in weaker forecast); economic growth (end of year comparisons) = 2.1% in 2010, 2.4% in 2011;
    unemployment = 10% in fourth quarter 2010, 9.1% in 2011Q4, core PCE inflation = 1% in 2010, 0.9% in 2011; growth in potential GDP = 2.1% during next 5 years before rising to 2.4% from 2015-2020

    IMF (January 2010): US economic growth = 2.6% in 2010, 2.4% in 2011

    Quarterly economic survey (USA Today – Jan 2010): economic growth = 2.8 in first half of 2010, 3% in second half;
    unemployment peaks at 10.2% in first quarter 2010, 9.7% by end of 2010; inflation averages 1.8% in 2010

    Bloomberg (January 2010): economic growth = 4% in fourth quarter, 2.7% in 2010;
    unemployment rises to 10.2% in first quarter of 2010 before declining to 9.7% at the end of the year; Fed begins to raise rates in fourth quarter 2010

    American Banker’s Association (Jan 2010): economic growth = 3.1% in 2010, core inflation = 1.2%,
    unemployment close to 10%

    Morgan Stanley (Dec 2009): economic growth = 2.8% in 2010 and 2011; core inflation = 1.4% in 2010 and 1.9% in 2011; Fed increases interest rate in third quarter 2010, reaching 1.5% by end of 2010 and 2% by end of 2011

    Livingston Survey (latest survey – Dec 2009): economic growth = 2.6% for the first half of 2010, 3% for the second half of 2010;
    unemployment rate = 10.3% in June 2010 and 9.9% in Dec 2010; inflation (CPI) = 2.2% for 2010 and 1.8% for 2011

    Univ. of Michigan Economic Forecast (executive summary – Nov 2009): economic growth = 2.3% in fourth quarter of 2009, 2.5% in 2010, 2.7% in 2011; core inflation (CPI) = 1.7% in 2010 and 2011;
    unemployment rate averages 10.1% in 2010 (peaks at 10.4% in early 2010, declines to 9.6% in 2011); total job loss of 7.5 million

    OECD: US Outlook, OECD Economic Outlook (Nov 2009): forecast for US – economic growth = 2.5% for 2010, 2.8% for 2011;
    unemployment rate averages 9.9% in 2010, 9.1% in 2011; inflation = 1.7% in 2010, 1.3% in 2011

    Commentaries on Economic Conditions
    Beige Book (Fed)
    Haver Analytics: up-to-date commentary on recently released economic data
    Current Economic Data

    Economy at a Glance (BLS): Orlando Metropolitan Area; Florida
    Economic Calendar (Briefing.com)

  3. The BLS numbers for the Birth/Death model are utterly whack. Expect major downward revision. Hiring will likely increase in 2010 but total wages and credit/money available in the economy are likely to decrease. I’m not gloom and doom for the recruiting business, but I dont see one thing suggesting debt deflation won’t happen because nobody wants to borrow or lend the massive pixelated reserves zapped into existance by the Treasury. The CPI is smoked too with Owners Imputed Rent which is nonsense- rents all around are falling.

    Inflation and big hiring/borrowing has one chance- if the Gov mandated massive changes in the energy and health complexes, which are the only areas without gross excess capacity right now. I hope they do but it does not look politically feasable right now. Psssst. Dont look but Oil is above $80, which starts to strangle life as we know it…….

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