After gasping for breath for close to two years, the U.S job market is beginning to show signs of life once more -- sort of. The Bureau of Labor Statistics has reported a gradual decline in the unemployment rate over the past few months. The department, in a report released on Friday, noted nonfarm payroll rose by 192,000, and the private sector added 222,000 jobs in February. The unemployment rate slid below the 9% mark -- a 0.1 percentage point fall from the previous month -- a trend obviously moving in the right direction. However, the underlying question is: Is the job market -- and the broader economic recovery -- truly on track to normalcy?
The Conference Board, a research organization, estimates the number of job openings advertised online at a total of 4.2 million. Estimates suggest that more than 300,000 new jobs have to be added every month to bring down the unemployment rate to a more "acceptable" 6% by 2014. However, on average, only about 130,000 jobs have been added every month since December 2010. The addition of jobs may mark the beginning of the end of the joblessness, but a true recovery in the actual sense of the word appears to be a distant dream at the moment.
Looking beyond numbers
Though new jobs are being created, hiring still remains slow. There are multiple factors responsible for this. According to the National Employment Law Project, new jobs that are currently available pay comparatively lower wages. It seems that workers may not be at the point where they're willing to trade down just to get back into work.
However, that's not all. Recruiters are having a difficult time finding suitable candidates.
A number of companies have jobs available but are struggling to find competent recruits. Connie Linardakis, chief human resources officer at Zions Bancorp
In other words, it's possible that recruiters are facing a situation that many have speculated might be true for a long time: Those still without jobs were not indiscriminately fired and have not accidently remained without a solid opportunity. Rather, these individuals tend to represent less talented members of the overall workforce. Thus, how motivated are firms going to be in the hiring of individuals they consider to be less qualified? Why can't they just cherry-pick from the competition and upcoming classes of graduate students and undergraduates, leaving the remaining unemployed out to dry?
The other side of the coin
As always, there are a multitude of economic factors at work. And any evidence to suggest one trend in place can easily be contradicted by another. For example, in February, U.S. firms shed 50,702 jobs -- the highest number in 11 months. Outsourcing has also weighed on the employment situation in the United States. In an attempt to save their hard-earned dollars, these firms have been outsourcing midlevel skilled jobs to Asian countries, dealing a blow to an already-struggling U.S. employment market. Microsoft
The Foolish bottom line
The beast of staggeringly high unemployment, which at some point in time had posed a threat to the future of the U.S., now looks somewhat tamed. However, the ugly scars of persistently high unemployment have become more prominent and are likely to stick around in the long run.
Concluding a return to normalcy on the basis of a decrease of a few percentage points in unemployment rate is probably not prudent. In fact, all signs point to perhaps a new normal in employment levels that we'll need to adjust to.
Fool contributor Zeeshan Siddique does not own any of the stocks mentioned in the article. General Motors and Microsoft are Motley Fool Inside Value picks. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of Microsoft. 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.