Encouraging Outlook: Unemployment Holds Steady at 9.7 Percent
March 5, 2010
(ChattahBox)— Despite dire predictions from many economists that February’s labor statistics would rise once again to a double-digit unemployment rate, the jobless rate held steady at 9.7 percent. And job losses overall, although not great, were not as bad as expected. Friday’s labor report shows a loss of 36,000 jobs in February, which is significantly less than the forecast of about 100,000 jobs. Although the record-breaking snowstorms in many parts of the country were predicted to have a catastrophic effect on job totals, Friday’s Labor Department report was unable to measure their impact, but anecdotal surveys show that many Americans stayed home because of the bad weather.
According to Bloomberg, many job hunters and workers stayed home during the bad weather. “One clue about the effect of the weather on employment may come from the survey of households, which the Labor Department uses to calculate the unemployment rate. Today’s report showed 1 million Americans said bad weather prevented them from getting to work during the survey week.”
Ellen Zentner, a senior economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, said in an interview with Bloomberg Television, “Without the weather in February this would have been a month for jobs growth.” “We’ve got positive jobs growth in there, we just can’t see it” due to the “weather effects,” she said.
Payrolls dropped 36,000 last month after a revised 26,000 decrease in January and the underemployment rate rose slightly to 16.8 percent from 16.5 percent.
The market sector not affected by bad weather looked encouraging for future job growth:
“Monthly employment gauges that are less influenced by weather point to job-market stability. The Institute for Supply Management’s employment gauge in non-manufacturing businesses, which covers almost 90 percent of the economy, rose to an almost two-year high. The group’s corresponding manufacturing index climbed to the highest level since 2005.”
“Companies in February cut the fewest jobs in two years, according to data from ADP Employer Services. Similarly, employers last month announced the fewest job cuts in more than three years, according to a report by the job-placement firm Challenger, Gray & Christmas Inc.”
And the hiring of temporary workers continued to grow, pointing to an encouraging outlook for future permanent hiring:
“The number of temporary workers increased 48,000 in February. Payrolls at temporary-help agencies often turn up before total employment because companies prefer to see a steady increase in demand before taking on permanent staff.”
See Bloomberg for more.