US cuts fewer jobs as economy recovers

The United States lost fewer jobs than expected in February and the unemployment rate held at 9.7 per cent, the government said, cautioning the data may be skewed by winter storms.   The Labor Department said nonfarm payroll employment fell by 36,000 jobs, surprising most analysts who estimated 67,000 losses amid severe winter weather that crippled the north-east. The January job losses were revised higher to 26,000, from 20,000, but the overall trend showed a gradual stabilisation in the labour market. The department said ‘‘it is not possible to quantify precisely the net impact of the winter storms’’ on the payrolls numbers. Most economists had expected the unemployment rate to rise to 9.8 per cent from 9.7 per cent in January. The rate had peaked at 10.2 per cent in October. The total number of unemployed was essentially unchanged at 14.9 million. The White House said the report was in line with a pattern of gradual labour market healing in recent months, but urged Congress to stimulate job creation that is critical for a sustainable economic recovery from the worst recession in decades. Christina Romer, the chair of President Barack Obama’s Council of Economic Advisers, called the unemployment rate ‘‘unacceptably high’’. ‘‘We need to achieve robust employment growth in order to recover from the terrible job losses that began over two years ago,’’ she said. ‘‘That is why it is essential that Congress pass additional responsible measures to promote job creation’’ as well as continue to support those struggling with unemployment. The House of Representatives passed a $US15 billion ($16.65 billion) measure on Thursday to help reduce unemployment, after a similar move by the Senate. The monthly labour market report, seen as a key indicator of economic momentum, underscored the persistent woes in the labour market, even after the economy emerged from a severe recession in mid-2009. The Federal Reserve, the White House and most economists have warned that high unemployment would continue as the world’s largest economy slowly recovers from the worst recession in decades. ‘‘Today’s employment report further highlights that there is a jobless recovery under way in America,’’ said Jason Schenker of Prestige Economics. ‘‘While leading economic indicators... continue to point towards growth and the Fed has acknowledged the return of a ’nascent recovery’, the US jobs market remains fundamentally weak,’’ he said. Economists say the ailing labour market poses a major challenge to a sustainable recovery, given that most of the growth in the past two quarters was due to government spending and the Fed’s near-zero interest rates. The economy expanded at a strong 5.9 per cent pace in the 2009 fourth quarter, following a 2.2 per cent rise in the third quarter that snapped a year of contraction. The Labor Department report said the number of long-term unemployed, those jobless for at least 27 weeks, was 6.1 million in February, roughly holding steady since December and accounting for 40 per cent of the unemployed. The number of people working ‘‘involuntary’’ part time for economic reasons rose to 8.8 million from 8.3 million, due to cuts in work hours or the inability to find a full-time job. The report noted the government hired 15,000 temporary workers for the 2010 census. The average workweek declined to 33.8 hours from 33.9 in January, while hourly earnings rose 3 cents to $US22.46 ($24.94). Hourly earnings have climbed by 1.9 per cent since February 2008.

 

< Prev		Next >