Highlights and Lowlights From the Jobs Report

There's no getting around it: The jobs market is getting better. After posting a third consecutive month of 200,000-plus jobs gains and adding 2.2 million jobs in the past year, you have to be tripping over yourself with bearish bias to not accept that progress is being made.

This morning's February jobs report showed a gain of 227,000 jobs last month, and the unemployment rate holding steady at 8.3% -- though it likely would have fallen to 8.2% if there had been 31 days in the month. The Dow Jones Industrial Average (INDEX: ^DJI  ) rallied some 50 points by midafternoon. Here are some other highlights:

  • Broader unemployment rates that include those who have given up looking for work and those who want full-time work are dropping quickly. U6, the broadest measurement of unemployment, fell to 14.9% from 15.1% in January. That's down from 16.7% a year ago.
  • Both the labor force participation rate and the employment-population ratio strengthened in February.
  • December's and January's preliminary jobs data were revised up by a combined 61,000. Initial unemployment numbers have now been revised upward for eight months in a row. This is what typically happens during recoveries (and the opposite of what happens at the onset of new recessions).
  • If you exclude the temporary 2010 Census hiring, January was the strongest jobs growth since 2005, and the eighth-strongest month of the past decade.
  • The household survey -- a separate labor metric that asks people, not businesses, whether they have a job -- is absolutely exploding, showing a monthly gain of 428,000, and an average gain of 349,000 in the past seven months.

Now what about the lowlights? There are a few:

  • A lot of the new jobs being created are in low-wage industries. A low-paying job is better than no job, but for many these are small victories that only support a meager quality of life.
  • It's still awful. If we keep growing at this pace, it will be several more years before we regain all the jobs lost during the recession.
  • Growth in average hourly pay over the past year was slow -- 1.8%, or less than the rate of inflation. Part of that was made up by employees working more hours, but that's a miserable way to keep up with inflation.
  • These numbers could turn around at any moment. The past two years have seen at least three bouts of temporary gains that quickly faded. This latest round is stronger and has been longer-lasting, but things change -- quickly.

Fool contributor Morgan Housel doesn't own shares in any of the companies mentioned in this article. Follow him on Twitter @TMFHousel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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  • Report this Comment On March 09, 2012, at 2:09 PM, TheDumbMoney wrote:

    Another positive is that it appears that there was a tiny net month-to-month gain in state/local government jobs for the first time in...a long time.

    DTAF

  • Report this Comment On March 09, 2012, at 10:11 PM, xetn wrote:

    According to the "official" government stats. But they continue to "massage" the data to make the government look much better.

    The best stats are at shadowstats.com and according to their stats, the unemployment rate is much, much worse (they compute the rate as it was originally defined; before they started "adjusting" the numbers):

    http://www.shadowstats.com/alternate_data/unemployment-chart...

  • Report this Comment On March 10, 2012, at 6:30 AM, MrChapel wrote:

    I fail to see what is so 'positive' about government jobs growth. These are not productive jobs, no matter how you want to slice it.

    Government jobs, certainly the majority of them, don't produce anything. In fact, they take away much from the actual production in the economy in the way of taxes needed to be raised to pay for those jobs. Yes, the money government workers earn goes back into the economy but it is still less productive than money earned by actual productive jobs holders. Having a job as Assistant to the head of custodial procurement and management, where your day-to-day job amounts to counting the number of paperclips the office uses is not as productive as actually making the paperclips themselves. But hey, you get a government income, including very high pension and medical benefits, all of which are, on average, higher than in the private sector, not to mention, if you're in the private sector, you are paying up to fifteen percent of your health insurance among other things. Something that is not the case for government workers, which pay, on average, barely a percent.

    So, please, explain to me how it is a net positive for the economy when government employment rises. And don't trot out the tired, old cliches of the military, police and other emergency services. Those are actual services the government is supposed to provide and those services are the ones the government, both state and local is gutting. In California alone, law enforcement pay and pension is so high, they have no idea how to pay for it. In many other parts of the country, police departments are being down-sized. The defense budget is being cut, medical benefits are under attack. Yet, government hiring is up, new agencies are being set up. Between the new agencies and rules being set up, the costs of doing business is also going up markedly, another way actual producing businesses are losing money.

    So, please, @dumberthanafool, explain to me how growth in government jobs is a positive.

  • Report this Comment On March 15, 2012, at 1:47 PM, mclaugph wrote:

    @MrChapel

    Maybe government jobs are wasteful in CA, but having had one in the Midwest I can tell you I've experienced otherwise.

    Growth in gov't jobs is a positive if you have a growing city and need more police or fire service. It's also a good thing if you'd rather cut the wait time at the DMV to less than an hour. :)

    My former coworkers and I were very busy providing real services to the general public, not counting paper clips. Perhaps you're going off stereotypes that are outdated or specific to your area?

  • Report this Comment On March 15, 2012, at 2:30 PM, DJDynamicNC wrote:

    MrChapel, I'm eager for you to provide some data on just how many paper clip counters there are in government.

    Government jobs do include police, firefighters, teachers, and soldiers, although apparently those jobs "count" based on your abitrary decision that they are productive and so should be allowed, but you don't count jobs that include monitoring imports for toxic substances, enforcing regulations keeping poison out of our food, delivering mail, providing customer service for people who need to interact with government services, ensuring traffic safety, tracking down terrorists, and many more.

    You can say that these jobs are not "productive" but I would be very surprised if you were to say that a customer service job at Verizon is not productive, or a private inspection job at a local port is not productive.

    You can argue that the government should not be in that business if you like, and that's a debate that a representative democracy can have, but to argue that such jobs aren't "real" jobs - but then turn around and make no such claim about the exact same work when provided by the private sector - is either illogical, deceptive, or both.

  • Report this Comment On March 15, 2012, at 2:43 PM, DJDynamicNC wrote:

    Morgan, re: the note that labour force participation rate strengthened - good news given the current state of affairs, I'm sure, but I would like to point out that labour force participation has been steadily declining (with some volatility, of course) since records began being kept after WWII.

    I'm not sure that's a bad thing, either; it makes sense for a more productive society to work less rather than take the productivity gains in terms of material compensation (of course, it makes much less sense to simply hand all of the additional gains over to 1% of the population who then return them to the population's new workers at a rate of 7.25 an hour, but that's a different battle). Personally, I'd much rather have more hours than more money, once I've hit a certain level of income, so that makes sense.

    I'm sure this also represents some of the increased life expectancy we keep hearing about; more time in retirement (and an aging population weighting the retired end of the scale) will also push down labour force participation, and also in a positive way.

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