Tags: Jobless | Rate | Work | force

Analysis: Jobless Rate Steady Even as Workforce Grows

Friday, 09 March 2012 08:58 AM

U.S. employment expanded solidly last month and the unemployment rate held steady at a three-year low, even as more people entered the workforce, a positive sign for the economy.

U.S. nonfarm employers added 227,000 jobs to payrolls last month, the third straight month in which gains were above 200,000, the Labor Department said on Friday.

The February reading was above expectations, although the gains were not distributed as widely across the economy as in the prior month.

Following are some key details from the report:

The unemployment rate held steady at 8.3 percent as a surge in employment, as measured by the Labor Department's household survey, was offset by more workers entering the workforce. That's a good sign for the economy because it suggests some discouraged workers might be starting up job searches once again as the labor market turns more upbeat.

The participation rate, which is the percent of the population in the workforce, rose to 63.9 percent from 63.7 percent in January. Like the jobless rate, the participation rate is derived from the household survey, while the main payroll jobs measure is from a survey of employers.

In a similar sign of vigor in the economy, the aggregate weekly hours index — a measure of the total work effort — climbed 0.2 percent from a month earlier.

The number of construction jobs fell last month by 13,000. That could mean there is less reason to suspect that a mild winter boosted payrolls in February, reinforcing the report's positive signal for the economy.

Sticking to a trend that has emerged since the economic recovery began in 2009 following a deep recession, the Labor Department revised upward its estimate for payrolls during previous months. Some 61,000 more jobs were created during December and January than initially estimated.

Factories added 31,000 workers to payrolls, less than during the prior month but still a solid reading. That suggests U.S. manufacturers are still a key support for global production.

Casting a shadow on the outlook, February's report showed job creation is spreading less widely into different sectors of the economy. The "diffusion index" for private payrolls slumped to 57.9 in February from 70.3 in January. That's the lowest reading since November 2011. A reading above 50 means more industries are increasing employment than decreasing employment.

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Friday, 09 March 2012 08:58 AM
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