The Labor Department released its February employment statistics today, and the report is full of cautiously positive indicators. Unemployment is at 8.9 percent--the first time it's been below 9 percent since April 2009--and private-sector employers added 222,000 jobs. Both of these figures are better than economists had predicted, and coupled with yesterday's report about falling jobless claims, they add up to a sense of optimism as we begin to round out the first quarter.
Here's how the numbers are being explained in the initial coverage:
- Weather has played a role this year. "It’s very clear weather was a factor in the depressed January results," said economist Richard DeKaser. "The smart way to look at this is to combine January and February and divide by two."
- The Fed might raise interest rates soon, maybe. Reuters reports that "economists believe the Fed will want to see payroll gains in excess of 200,000 for at least six to nine months and a significant decline in unemployment before starting to withdraw its massive monetary support from the economy." February's numbers are a step in that direction. Reuters quotes economist Ryan Sweet, who says that "if we start to add enough jobs, sufficient to lower the unemployment rate, I think the Fed will feel a little more comfortable in easing off the throttle ... But right now, the economy is still fragile. There are a number of potholes that we can hit and the Fed is not going to want to act on exiting any time soon."
- Mark Zandi feels okay about it. Zandi, the Moody's Analytics economist who recently predicted that the GOP budget cuts would kill 700,000 jobs, seems sanguine about the Labor Department's numbers. "All signs point to much stronger hiring," Zandi is quoted as saying in the Associated Press. "I think we finally have a prescription for a better job market."
- But unemployment probably won't dip below 7.5% for a while. The Wall Street Journal notes that "despite some positive signs, the Fed still expects unemployment to range from 7.5% to 8% at the end of 2012." In other words, a lot of people will still be looking for work when the election comes around. Something for both parties to keep in mind.