Unemployment Stays Flat at 9.7% - Update
After hitting double digits from October-December 2009, the official U.S. unemployment rate stayed flat at 9.7% in February 2010. The economy shed 36,000 non-farm payroll jobs, a moderate increase from 20,000 the previous month but still a significant decrease from the 85,000 lost in December 2009.
Retail trade employment was unchanged last month, following a substantial gain of 42,000 jobs in January 2010. Job gains occurred in temporary help services (48,000).
The February 2010 unemployment rate reflects unemployed persons actively looking for work. According to the Bureau of Labor Statistics, it stood at 5% when the recession began in December 2007. Since that time, the number of unemployed persons has increased about 91%, from 7.7 million to 14.7 million. In January 2010, 14.8 million persons were counted as unemployed.
Looking beyond these numbers, many more Americans are unable to find work than those counted in the official unemployment figure. The civilian labor force participation rate, which is the proportion of the non-institutionalized civilian population age 16 and older serving in the labor force, marginally rose from 64.7% to 64.8%. This figure stood at 66% in December 2007. The employment-population ratio, which measures the ratio of employed persons to the total non-institutionalized civilian population age 16 and older, also slightly improved from 58.4% to 58.5%. It stood at 62.7% in December 2007.
Several other pieces of unemployment data show mixed signals about the the U.S. job situation. These include:
- The number of employed persons working part-time for economic reasons rose 6%, from 8.3 million to 8.8 million.
- About 2.5 million persons were marginally attached to the labor force, an increase of 476,000, or 19%, from 2.24 million persons in January 2009. These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the four weeks preceding the survey.
- Among the marginally attached, there were 1.2 million discouraged workers, a significant 152% increase from 473,000 discouraged workers a year earlier and 48% of total marginally attached workers. Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The other roughly 1.3 million persons marginally attached to the labor force last month had not searched for work in the four weeks preceding the survey for reasons such as school attendance or family responsibilities.
However, a recent privately produced source of unemployment research indicates that more jobs may be on the way starting in April 2010. According to the November 2009 Outlook from the National Association of Business Economists (NABE), the official U.S. unemployment rate should peak in Q1 2010. However, beginning in Q2 2010, the NABE study predicts U.S. employers will begin adding jobs, which will ease the U.S. unemployment rate. So far the U.S. employment situation is moderately improving ahead of schedule, at least in terms of the official rate sustaining sub-Q4 2009 levels for the first two months of Q1 2010.
Although economists surveyed by NABE predict U.S. employers will begin hiring next year, they do not foresee an immediate turnaround. Sixty-one percent predict unemployment will not return to pre-recession levels until 2012, and the consensus is that unemployment will remain above 9% throughout 2010.