February 2012 Employment Report

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According to the Bureau of Labor Statistics (BLS) non-farm payroll employment rose by 227,000 in February, and the unemployment rate was unchanged at 8.3 percent. February’s private-sector job growth was widespread and amounted to +233,000 among professional and businesses services, health care and social assistance, leisure and hospitality, manufacturing, and mining; government employment shrank by 6,000 (mostly at the federal level). The change in total nonfarm payroll employment for December was revised from +203,000 to +223,000, and the change for January was revised from +243,000 to +284,000.
 

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As we have been pointing out for quite some time, employment is converging with the previous peak at a slower pace than any prior recession going back to 1973. The economy still has 5.3 million fewer jobs than at the beginning of the 2007 recession, a level previously seen in February 2009 and February 2005.
 

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The number of people not in the labor force dropped by 310,000 in February, after jumping by 1.177 million in January (that jump was likely due in large part to BLS rebenchmarking activities). Although the ratio of employed persons to the entire population is at its highest since May 2010 (0.586), the trend remains mildly negative (i.e., employment growth is still lagging behind population growth).
 

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The civilian labor force participation rate (the share of the population 16 years and older working or seeking work) bounced off of January’s low of 63.7 percent (the lowest value since May 1983) while rising to 63.9 percent in February. At the same time, the annual percentage increase in average hourly earnings of production and non-supervisory employees ticked higher, to 1.6 percent (0.15 percentage point higher than January’s 1.45 percent, which was a record low stretching back to when such data began to be collected in 1964). With the price index for urban consumers rising at a 2.9 percent annual pace, wages are falling in real terms (i.e., wage increases are not keeping up with price inflation).
 

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Full-time employment increased by 563,000 at the same time part-time employment fell by 111,000. The declining trend for part-time employment appears to be strengthening; so, too, is the upward trend in full-time employment (especially if viewed from January 2010).

Taken at face value, this employment report appears quite positive.