In February, unemployment in the U.S. fell to 7.7 percent, its
lowest point in four years according to the Labor Department, as
236,000 new jobs were added. While employment growth was the
leading cause for the falling unemployment rate, it was pushed
lower still by a decreased participation rate, which decreased by
0.1 percent. Employment growth managed to significantly beat
consensus economist estimates that employment would grow by about
160,000 positions in February. Nearly 2.4 million jobs have now
been added to the U.S. economy over the last twelve months.
While there was growth across most sectors of the
economy, there were pockets that saw notable levels of growth.
Construction, which has seen minimal growth over the last several
years, grew by 48,000 positions in February, keeping pace with the
overall rate of growth in the U.S. Additionally, temporary help
services grew by 16,100 positions and accounting and bookkeeping
services grew by 10,900. One interesting area for growth was the
motion picture and sound recording industry, which grew by 20,800,
from just 374,800 total positions in January.
???The unemployment rate for those with a bachelor’s degree or
higher edged up slightly from 3.7 to 3.8 percent on an increased
participation rate with total employment growing significantly. The
unemployment rates for those with high school degrees but not
bachelor’s degrees actually fell substantially in February. Yet,
for this group, unemployment declines were driven more by a falling
participation rate than growing employment. The management,
professional and related occupations unemployment rate dropped
year-over-year from 4.2 percent to 3.8 percent as total employment
grew by close to 1.4 million in the last year.
Put in a historical context, February’s unemployment report
shows monthly growth that is the second-strongest since last
February, when employment grew by more than 270,000 jobs. For the
past several years, though, February has been the last month of
strong employment growth before a deceleration going into the
summer.
In March, another wrinkle will be added with sequestration,
which took effect on the 1st of the month. Observers will be
looking closely to see what effects it will have on employment in
the coming months. While layoffs are expected to affect government
contractors almost immediately, government agencies will instead
mostly be relying on furloughs which begin this month.
Overall, this report far surpassed many expectations and was
made all the more impressive by the headwinds seen in Europe’s
employment markets. Employment continues to grow and, even with
sequestration coming into effect, expectations are for growth to
continue for the remainder of the year as the economy looks to
consumer and corporate demand to make up for the decline in
government spending.
