Brisk job growth puts U.S. economy on firmer footing

By Don Lee

March 9, 2012 12 AM PT

Los Angeles Times

Reporting from Washington — The American economy kept creating jobs at a brisk pace in February, providing strong evidence that the labor market is firming up despite higher gas prices and an unsettled global economy.

The Labor Department said Friday that employers across the country added 227,000 net new jobs last month, slightly more than what most economists were expecting. Hiring in healthcare and manufacturing was particularly robust. It was the third straight month of job gains in excess of 220,000.

The nation’s unemployment rate held steady at 8.3% in February after falling for five straight months. The rate would have dipped lower, but many more people flooded back into the labor force.

“That means people feel more confident about the job market, and some of those discouraged people are heading back” to work or to search for work, said Augustine Faucher, a senior economist at PNC Financial Services Group in Pittsburgh.

Job growth has been accelerating since summer and looks increasingly to be on a sustainable path after a bumpy recovery marked by fits and starts.

Although there are persistent concerns -- including rising commodity prices, Europe’s debt crisis and America’s weak housing market -- the latest jobs report indicated that big cuts at budget-strapped state and local governments have bottomed.

In February, total government payrolls fell 6,000, and that was entirely because of reductions at the federal level. That followed a loss of just 1,000 jobs in government in January. By contrast, between December 2009 and December 2011, state and local governments shed about a half-million jobs combined.

For state and local governments, “the budget picture has improved,” said Dean Baker, co-director of the Center for Economic and Policy Research in Washington. “I think we’re pretty much at the end of that,” he said of the long period of retrenchment in staffing.

Hiring in the private sector, meanwhile, has been picking up as confidence has increased. Last month, about a third of the new jobs, or 82,000, came from professional and business services, a broad category that includes lower-paying temporary-help workers and high-paying computer engineers.

The temporary-help sector alone added 45,000 jobs -- something that many people see as a leading indicator of future hiring. About 40% of temporary-help workers end up getting permanent jobs, said Melanie Holmes, vice president at staffing agency Manpower Group.

“It’s very broad-based,” she said of Manpower’s first-quarter hiring survey showing increasing optimism in adding staff nationally.

Last month, the healthcare and social assistance sector added 61,000 positions. The leisure industry, likely boosted by the warm weather, beefed up payrolls by 44,000. And manufacturers reported another month of strong gains, bolstering employment by 31,000, with solid hiring in metals, transportation, machinery and furniture.

Adding to the positive news, officials said hiring in the prior two months was stronger than previously estimated. Job growth in January was revised up by 41,000 to 284,000. And the payroll count for December was increased by 20,000 to 223,000.

Still, the total number of unemployed people last month remained at nearly 13 million, with 43% of them reporting that they had been out of work for more than six months. And 8.1 million workers said they were stuck in part-time jobs because of slow business or cutbacks, although they wanted full-time hours.

In addition, analysts pointed out that the mild winter weather probably boosted some industries, including construction, restaurants and some services. And some of those gains, they said, could take away from growth in the coming spring months.

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