What We Can Say About Today's Big Job Gains

     In February the numbers out of the BLS blew the lining off the ball relative to expectations.

     "The U.S. economy added 236,000 jobs in February, the Labor Department said Friday. The unemployment rate fell to 7.7 percent."

      http://livewire.talkingpointsmemo.com/entry/economy-adds-236-000-jobs-in-february-unemployment

     To be sure the initial numbers are always subject to being revised and usually are as were January and December:

     "December and January revisions, from the Labor Department:

      "The change in total nonfarm payroll employment for December was revised from +196,000 to +219,000, and the change for January was revised from +157,000 to +119,000." 

       The question is what the impact of the sequester may be. What can't be denied is that we at least were seeing real progress prior to the sequester:

       ""The big question was whether this much job creation can be sustained. The answer is now complicated by the budget cuts under the sequester," said Kathy Bostjancic, director of macroeconomic analysis at The Conference Board. "What is clear however, is that the labor market was gaining traction before the sequester."

        The Obama White House argues this shows the recovery is gaining traction-or at least was... 

        "White House Council of Economic Advisers Chairman Alan Krueger released the following statement on the February jobs report: 

While more work remains to be done, today’s employment report provides evidence that the recovery that began in mid-2009 is gaining traction.  Today’s report from the Bureau of Labor Statistics (BLS) shows that private sector businesses added 246,000 jobs in February.  Total non-farm payroll employment rose by 236,000 jobs last month. The economy has now added private sector jobs every month for three straight years, and a total of 6.35 million jobs have been added over that period.

The household survey showed that the unemployment rate fell from 7.9 percent in January to 7.7 percent in February, the lowest since December 2008.  The labor force participation rate edged down 0.1 percentage point to 63.5 percent in February.

It is important to bear in mind that the reference period for today’s surveys was the week of February 10-16 for the household survey and the pay period containing February 12th for the establishment survey, both of which were before sequestration began.  The Administration continues to urge Congress to move toward a sustainable Federal budget in a responsible way that balances tax loophole closing, entitlement reform, and sensible spending cuts, while making critical investments in the economy that promote growth and job creation and protecting our most vulnerable citizens.

According to the establishment survey, in February employment rose notably in professional and business services (+73,000), construction (+48,000), health care (+32,000), leisure and hospitality (+24,000), and retail trade (+23,700).  Manufacturing gained 14,000 jobs in February.  The manufacturing sector has added over half a million jobs over the last 37 months, the most for any such period since 1986.  In the last two years the construction sector has added 306,000 jobs, with half of that increase occurring in the last five months.  State and local governments lost 10,000 jobs in February, mostly in education.  The local government education sector has now lost 340,700 jobs since its recent peak in November 2009.

As the Administration stresses every month, the monthly employment and unemployment figures can be volatile, and payroll employment estimates can be subject to substantial revision. Therefore, it is important not to read too much into any one monthly report and it is informative to consider each report in the context of other data that are becoming available.

      http://livewire.talkingpointsmemo.com/entry/white-house-says-jobs-report-shows-recovery-gaining

      Appreciate how they still got in the concern we have with the sequester. Boehner used the report as an opportunity to cherry pick:

      House Speaker John Boehner (R-OH) released the following statement on the February jobs report:

“Any job creation is positive news, but the fact is unemployment in America is still way above the levels the Obama White House projected when the trillion-dollar stimulus spending bill was enacted, and the federal government's ongoing spending binge has resulted in a debt that exceeds the size of our entire economy. As 180 economists said in a statement this week, our spending-driven deficit threatens our economy, and responsible spending cuts are needed ‘to help put the country on a path to a balanced budget within ten years.’ And yet there’s news today that the president's budget, which is already more than a month late, might slip to April.

“Without a plan to control spending and balance the budget, our national debt will keep piling up on the backs of our children and grandchildren; our most important safety net programs will grow weaker and weaker; and the prospects for long-term economic growth will dim. That’s why the House will begin work next week on a budget that offers a better path forward, one focused on more economic growth and more jobs. Our plan will balance the budget within 10 years. And it will lay the groundwork for a fairer, simpler tax code that closes loopholes and lowers rates to help create new jobs, increase wages, and grow our economy long-term. Every family has a stake in this debate. And we hope they’ll visit speaker.gov and share their thoughts as we work to address our debt and expand opportunities for all Americans.”

      http://livewire.talkingpointsmemo.com/entry/boehner-unemployment-still-above-levels-obama-promised

      Mitt Romney has been back in the news-not from popular demand-so why does Boehner feel the need to make his tired argument about what employment projections back in 2009?o As for scolding over the debt,  he sure doesn't establish any causality between high debt levels and lower growth and jobs. Today's strong numbers hardly left him any argument for this and his going here is a real reach.

      What's clear is the pre-sequester economy has been getting stronger and stronger. Hardly can see a reason why you want to add this drag on growth now.

       So what might this indicate going foward? According to Jared Bernstein it depends on what real trend growth is now:

       "Payrolls expanded by 236,000 last month and the jobless rate ticked down to 7.7 percent, its lowest rate since late 2008, outperforming analysts expectations. Hours worked per week increased and hourly pay rose as well, suggesting a potential improvement in employer demand (though, as noted, some indicators in the report point the other way -- these monthly reports are never an analytical slamdunk).

Whether the better-than-expected results signal a faster underlying trend in job growth, and whether it can withstand the fiscal drag from the sequester, is yet to be seen, a point I return to below."

         "Since we want to avoid reading too much into any one month in these volatile data, the smart move is to average the last few months of payroll gains to smooth out the noise. Doing so reveals some acceleration in hiring: over the past three months, average monthly gains were 191K; over the prior three months, 182K; and over the three months before that, 135K."

       "The question is not whether the sequester will hurt -- it's likely to reduce growth by about half-a-percent and kill a bunch of jobs too. The question is "off of what base?" If the economy can strengthen such that it's growing 2.5-3 percent this year then 0.5 percent slower growth still means at least slowly declining unemployment. But if underlying GDP growth is 1.5-2 percent, the impact of the sequester could be such that we'll longingly look back on reports like today's."

        http://www.huffingtonpost.com/jared-bernstein/february-jobs-report_b_2836587.html