WASHINGTON — The nation's unemployment rate held steady at 9.7 percent in February and employers shed another 36,000 jobs, new government data showed Friday, signs that the U.S. economy is recovering slowly from the deep recession.
The Obama administration had hoped that job numbers from the Labor Department would show net gains for February, but the record snows in the Northeast and bad winter weather in much of the rest of the country may have affected the picture, especially in construction, which lost 64,000 jobs in February.
While the headline number remained slightly negative, the report had some positive signs. Manufacturers added jobs for the second straight month, albeit not that many, around 1,000. More comforting was the services sector, which added 42,000, and professional and business services employment, which increased by 51,000 jobs.
In addition to the losses in the hard-hit construction sector, jobs tied to goods production were down by 60,000 and government hiring was down 18,000.
"The good news is that businesses are no longer laying off workers; the bad news is that they are still not hiring. The job market is flat," said Mark Zandi, the chief economist for forecaster Moody's Economy.com in West Chester, Pa. "This is progress compared to the massive job losses of a year ago, but it isn't enough progress to conclude that the economy is off and running."
Statisticians at the Bureau of Labor Statistics also revised their December numbers to reflect that 109,000 jobs were lost that month, not the 150,000 that the BLS first reported. For January, however, they revised in the other direction, saying that 26,000 jobs were lost, not the 20,000 initially reported.
Many economists had expected the unemployment rate to tick back up as workers who'd given up searching for jobs began trying again. That view is coming into question because the jobless rate held steady again.
"Many had expected that some of January's 0.3 percentage point decline would prove to be a transitory drop. That it was maintained for a second month makes it more likely that it was a genuine decline, not statistical noise," Christina Romer, the head of the White House Council of Economic Advisers, said in a statement. "The number of workers unemployed for more than 26 weeks fell by 180,000, the first decline in over a year."
There was other evidence that employers are slowly moving to boost their hiring. Data gleaned from surveys of U.S. households showed that 308,000 more Americans reported that they were employed in February, compared with a month earlier. Likewise, the number of people who reported themselves as not in the labor market fell by 167,000 last month when compared with January.
However, as is the case with the offsetting gains and losses in different sectors of the economy, some of what households reported cast doubt on whether a firm recovery has taken hold. For example, the number of people who reported that they're working part time for economic reasons rose by 475,000 last month, while those who said they're working part time because of slack business conditions increased by 312,000.
"The report today shows a labor market with no momentum, though the snowstorm's impact creates some uncertainty. The good news is the unemployment rate is not returning to the 10.1 percent level of October," said Larry Mishel, the president of the Economic Policy Institute, an economic-policy research group that advocates for working Americans. "The bad news is that employment is not growing, and even a generous interpretation of the snow's impact suggests the underlying trend is insufficient to be driving down unemployment in the near future. Also disappointing is that wage growth remains minimal."
Mishel's last point underscores why Democrats in Congress are trying to give temporary tax breaks to employers who boost their workers' wages. If wages remain flat and recovery uncertain, consumers are unlikely to boost spending, and spending is needed to spark a chain reaction that sets the rusty gears of the U.S. economic engine into a drive mode.