South By North Strategies, Ltd.

CHAPEL HILL (March 4, 2011) – The national economy netted 192,000 payroll positions in February, which was the fifth consecutive month of job growth. While strong by recent standards, the level of growth is insufficient to alter the basic employment picture. Unsurprisingly, then, the unemployment rate and associated measures of joblessness changed little in February. These findings come from the latest national employment report.

“Net job growth of 192,000 positions in February is a real improvement over the abysmal job growth recorded in January,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “February marked the fifth straight month of net job growth, but the economy still is not growing rapidly enough to replace many of the jobs lost during the 2007-09 recession.”

In February, the nation’s employers added 192,000 more payroll positions than they cut. Gains occurred entirely within the private sector (+222,000), while government payrolls fell by 30,000 positions due to cuts at the state and local levels. In recent months, reductions in employment among state and local governments have dragged down job growth. Furthermore, the payroll employment numbers for December and January were revised upwards. With the revisions, the economy netted 215,000 jobs over those two months rather than the 157,000 positions previously reported.

Private-sector gains in February occurred primarily in professional and business services (+47,000, chiefly in the employment services sub-industry), education and health services (+40,000), manufacturing (+33,000), and construction (+33,000). With the exception of the information industry, all other private-sector industry groups grew in February.

“The February employment report suggests that a level of job growth has taken hold in the United States,” noted Quinterno. “Over the past two months, net job growth has averaged 127,500 positions, but that pace is insufficient to replace the jobs lost during the recession.”

The inability of the current pace of job growth to alter employment conditions was reflected in the February household survey. Last month, 13.7 million Americans (8.9 percent of the labor force) were jobless and seeking work. Over the past year, the unemployment rate and number of unemployed individuals fell, but so did the size of the labor force. In February, the share of the population participating in the labor force (64.2 percent) was not only lower than one year ago, but also was stuck at a level last seen in the early 1980s.

Last month, proportionally more adult male workers were unemployed than female ones (8.7 percent vs. 8 percent). Similarly, unemployment rates were higher among Black (15.3 percent) and Hispanic workers (11.6 percent) than among White ones (8 percent). The unemployment rate among teenagers was 23.9 percent. With the exception of adult women, unemployment rates for every major demographic group were lower in February than in January.

Furthermore, 9.2 percent of all veterans were unemployed in February. The unemployment rate among recent veterans (served after September 2001) was 12.5 percent.

“Despite the sharp drop in the unemployment rate, jobs remained difficult to find in January,” added Quinterno. “Last month, the underemployment rate equaled 15.9 percent. Among unemployed workers, 43.9 percent had been jobless for at least six months with the average spell of unemployment lasting for 37.1 weeks.”

“The February employment report suggests that labor market conditions have stabilized,” observed Quinterno. “Unfortunately, the level of growth simply is not good enough to reverse the damage caused by the recession. If the February rate of job growth were maintained, holding all else equal, it still would take a period of years to replace the roughly 7.7 million jobs lost since December 2007.”