Real Job Gains in February

The jobs report for February (link provided above) was the best since the beginning of the Great Recession.  Non-farm payrolls grew by 192,000 and private payrolls grew by 222,000.  (The difference, of course, is due to a decline of 30,000 in government payrolls.)  And this time the numbers are real.  The “employment level” – the total number of Americans employed – grew by 250,000.  And the reliance upon the “mysteriously vanishing labor force” to drive a bogus drop in unemployment seems to have (at least temporarily) been suspended this month, with an actual rise of 60,000 in the “civilian labor force.”  (Still, that’s probably a bogus number since population growth adds, on average, 125-150,000 workers per month.)  So it seems that the one tenth of a percent drop in the unemployment rate to 8.9% is probably real, though the number itself is well below the actual U3 unemployment rate of 11.5%

Here’s my calculation:

Unemployment Calculation

And here’s a chart of the unemployment rate:

Unemployment Chart

One thing I should point out is that the calculation actually uses a slightly reduced figure for U.S. population beginning with this month.  That’s because the Census Bureau stopped publishing its monthly estimate of population with its December 1st estimate.  I’m guessing that it’s in the process of digesting new figures from the 2010 census.  So in the meantime, I’m using the Census Bureau’s U.S. population clock, which seems to be running a little behind where it would be if the growth in the monthly population estimate had been maintained.  What this probably means is that the 2010 census came in a little below the running estimate based on the previous 2000 census.  In other words, population growth has slowed a bit.  That’s good news!

Here’s the charts of unemployment that I’ve been maintaining.  Still a bad picture, but one that showed a little improvement in February.

Unemployed Americans

Labor Force & Employment Level

Per Capita Employment

The job gains, based on the Labor Department’s establishment survey, break down as follows:

  • Manufacturing:  + 33,000
  • Construction:  + 33,000
  • Professional & business services:  + 47,000
  • Health care:  + 34,000
  • Transportation & warehousing:  + 22,000

The good news is that the economy is finally adding jobs for real.  The bad news is that it’s driven by tsunami of debt and a Federal Reserve program of mopping up that debt to hold down interest rates.  Neither is sustainable.  The other day, Bill Gross, co-chief investment manager of Pimco, the world’s largest bond fund manager – a man who knows a little something about bonds and government debt – predicted an economy-killing rise in interest rates if the Fed ends its “QE2” bond purchase program in June as planned.  

But the Fed is under pressure to do exactly that, from those rightfully concerned about a huge bubble in treasuries.  And lawmakers are under pressure to rein in the debt.  They kicked that can down the road by two weeks, but the threat of a government shut-down still looms.  The time bought by the deficit spending to repair the economy is growing short and has largely been squandered.  Two years into the program, and only now is manufacturing showing signs of rebounding when the time could have been used to fix trade policy, restore a balance of trade, and bring manufacturing jobs home by the millions, instead of by a few tens of thousands.

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