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No recovery yet for US labour market

Monday 8th March 2010

By Mike Jones

The latest United States Bureau of Labor Statistics release shows that total non-farm payrolls fell by 36,000 in February.
Though higher than the 26,000 jobs lost in January, it is lower than the consensus expectation of 50,000 lost jobs for the month.

According to cebr economist Arek Ohanissian, revisions to the history of this series – including a change from the previously reported fall of 150,00 in December to a fall of 109,000 – indicate that payroll employment has fallen by 8.4 million since the start of the recession in December 2007.

Results from the household survey, separate to the establishment survey data used for the non-farm payroll figures, show that the unemployment rate remained steady in February at 9.7%. The number of long-term unemployed (more than 26 weeks) remains steady as well at 6.1 million.

A closer examination of the establishment survey results reveals that the largest decline in employment once again was in construction which lost 64,000 jobs compared with the 75,000 lost in the previous month. Meanwhile, manufacturing, which increased payrolls by 20,000 in January, has reported an increase for the second consecutive month – albeit a relatively minor gain of only 1000. The biggest gains to payrolls came from temporary help services (47,500) and education and health services (32,000). Payrolls in the government category fell by 18,000.

The latest figures suggest that the economic recovery in the US may be slowing relative to the pace in the fourth quarter of last year. The severe weather experienced by large parts of the country in the early part of this year was not helpful to the cause either. If confidence and consumer spending do not pick up, the bounce witnessed from the turn in the inventory cycle will eventually wear off and the economy will move to a slower – and potentially jobless – recovery.

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