The Department of Labor reported early Friday that 262,000 jobs were created nationwide in February, a number significantly higher than Wall Street's expectations, which had broadly expected an increase of around 218,000. In January, only 132,000 jobs were created, and economists estimate that about 150,000 new jobs need to be opened up each month just to absorb the number of new workers entering the marketplace.
The latest data "is good news for America and the growth of our economy. More than just a statistic, this number means that 262,000 Americans looking for a job, have now found a job," stated Treasury Secretary John Snow shortly after the announcement.
Indeed, the rate of job growth was the biggest since October, much to the delight of top Bush administration officials.
Labor secretary Elaine Chao too made sure that her support for the latest results were heard.
"Three million new jobs have been created in the past 21 months and construction employment and spending are at an all-time high," Chao said.
Job growth in the service sector was particularly strong, with employment from temporary help services agencies alone adding 30,000 jobs over the month. In fact, since its most recent low in April 2003, employment by temping agencies has increased by 374,000, according to the Bureau of Labor Statistics.
Other growing industries included architectural and engineering services, with construction employment alone rising 30,000, while the health care sector added 23,000 new jobs as well. Meanwhile, the food sector expanded by 27,000 while retail grew by 30,000.
As for the manufacturing sector, it saw 20,000 jobs being created in February largely due to the fact that car factory workers returned from temporary layoffs, Labor reported.
"It seems as if almost every industry is getting into the act and starting to hire again," said Joel Naroff of Naroff Economic Advisors.
To be sure, all this is good news for job-seekers. But the problem is that job creation is only one side of the employment market. Labor also reported Friday that the unemployment rate in February increased to 5.4 percent from 5.2 percent the previous month.
Granted, the head of the Bureau of Labor Statistics, Kathleen Utgoff, pointed out that the jobless rate has been between 5.4 and 5.5 percent during the latter half of 2004. Moreover, administration officials argued that the slight uptick in the jobless rate despite the addition of new jobs was a result of more people becoming confident that they would be able to get a paying position if they put themselves out for one, instead of simply giving up and not looking for a job at all.
Such arguments, however, "sounds a bit like rationalization as the labor force did not grow particularly rapidly in February and is actually down from the November levels," argued economist Naroff, adding that "I am somewhat confused about what they are referring to. Essentially, the unemployment rate is where it has been for six months and that is all that can be said."
For instance, the number of people unemployed for more than 27 weeks, which is the length of time U.S. workers are entitled to unemployment benefits paid by the federal government, remained unchanged at 1.6 million. That accounts for only one-fifth of the total number of jobless people who are currently seeking work.
In fact, the Economic Policy Institute argued that stepping back and putting the numbers into perspective, there are still 477,000 fewer private sector jobs now than there were in March 2001, when the dot-com bubble burst, even though 809,000 jobs were created in the government sector during that time.
Meanwhile, even as Treasury's Snow argues that productivity gains -- or higher worker output per hour -- is good for the U.S. economy, Peter Morici of the University of Maryland countered otherwise.
"Though productivity growth continues to post strong gains, wages for hourly workers remained flat in February, indicating wages adjusted for inflation continued to fall," Morici said, adding that "profits may be robust but persistently high unemployment and falling wages indicate America enjoys a false prosperity."
While economist Naroff was not as gloomy, he argued that "the job gains will likely fade back toward 200,000 next month," and added that he was more concerned about wage growth, or lack thereof.
Tesla could face sales ban in Michigan
Twitpic to shut down after failed acquisition