February Hiring Boost Reduces Unemployment Rate to 7.7 Percent
With the addition of 236,000 jobs in February, the boost in hiring has led to a reduction in the unemployment rate from 7.9 percent in January to the current 7.7 percent. The data suggests that the economy can still become stronger despite higher taxes and massive spending cuts. Not only is the unemployment rate at its lowest in four years, job growth has averaged over 200,000 jobs per month since November as wages rose and the construction and housing markets embarked on a recovery. The number of unemployed, in February, fell by 300,000 to a little over 12 million; a number not seen since December 2008.
While 130,000 individuals were removed from the unemployment ranks due to giving up their job search, 170,000 of the previously unemployed found jobs. Job gains were slightly lower in January than first estimated (119,000 added jobs instead of 157,000), hiring was stronger in December than initially measured (219,000 added jobs instead of 196,000). Improving auto sales and a persistent housing recovery are also spurring more hiring.
“This may not yet be the substantial improvement in the labor market outlook that the Fed is looking for, but it’s moving in the right direction,” said Paul Ashworth, an economist at Capital Economics.
The construction industry alone has added 151,000 jobs since September and 48,000 in February. Manufacturing has gained 39,000 jobs since November and 14,000 in February. Other growth industries in February include retailers (24,000 jobs), education and health services (24,000 jobs), and the information industry (20,000 jobs).