According to the U.S. Bureau of Labors report, just 21,000 workers were added to payrolls in February, as the jobless recovery continued. Thats far below the 150,000 additional jobs that economists estimate are needed each month to keep pace with growth in the workforce and to hold unemployment at its current official level of 5.6 percent. In addition, the figures show that the average period of unemployment increased to 20 weeksthe longest since 1984.
The new jobs all involve hiring by the government. Payrolls at private companies did not rise at all. Meanwhile, some 24,000 workers lost jobs in construction while factories laid off another 3,000 workersthe 43rd consecutive monthly drop in manufacturing.
Commenting on the report, the March 6 New York Times noted that companies are reluctant to add workers even though the economy grew at an annual rate of 6.1 percent during the second half of last yearthe fastest pace in almost two decades.
The labor bureau survey also noted that hiring in November and December was weaker than previously reported. Those figures were adjusted down from 16,000 to 8,000 new jobs in November and from 112,000 to 97,000 in December. Until August, the number of jobs was actually shrinking.
The latest figures have sharpened debate on the methods for calculating the jobless rate. The labor department employs two methods, producing differing results. The payroll survey, which is based on responses from 400,000 companies, shows a loss of 2.2 million jobs since early 2001. By contrast, the household survey, drawing on responses from 50,000 households, shows an increase of 500,000 jobs over the same period.
Federal Reserve Board chairman Alan Greenspan told Congress last month that he increasingly considers the payroll survey to provide the more accurate read of the unemployment situation.
The March 8 Wall Street Journal found something to cheer in this picture. The positive news, it said, is the continued improvements in productivity as companies find ways to raise output without expanding their work forces. While painful for many workers these productivity gains have helped boost corporate profits.
Joshua Shapiro, an analyst at a new York economic research firm, put it more bluntly. This is a different cycle, Shapiro said of the recovery. To the extent that companies can squeeze another drop of blood out of their existing work force, theyre doing it. Eventually you reach the point where theres no more blood to be given, but we havent reached it yet.
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