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Note on the February 2010 Employment Situation

Even though the recovery of the job market remains painfully slow, the latest Bureau of Labor Statistics (BLS) employment report showed that the labor market continued to score gains in February. For the 25th time in the last 26 months, payroll employment declined in February, but the decline was very small. Payroll employment outside the hard-hit construction industry actually rose last month. The poor performance of construction might have been partly due to severe weather in the middle Atlantic states. Bad weather may also have affected weekly hours worked, which fell last month after rising in January. The work week remains slightly higher than it was early last fall.

Another heartening sign in the payroll statistics is the continued growth of employment in temporary help agencies. After reaching a low point last September, payrolls in the temporary help industry have grown for five successive months, climbing more than 16 percent. The strength of employment in temporary help services reflects the fact that more employers are experiencing shortages in the number of permanent workers on their payrolls.

The most encouraging sign in the BLS report is the continued rise in employment shown in the household survey. The number of adults reporting they have jobs increased by almost 310,000 in February after climbing by 540,000 in January. Most of the two-month rise in employment has been in full-time jobs, which have increased by 586,000 since December. In spite of this good news, the unemployment rate held steady in February. It did not fall because a large number of adults entered the labor force. The labor force participation rate rose in both January and February, possibly reflecting greater optimism among some of the jobless about their prospects for finding work.

In another piece of good news, the number of jobless workers who have been unemployed 6 months or longer fell by 180,000 in February, after soaring in the previous year. Between February 2009 and January 2010, the number of Americans who have been unemployed 6 months or longer increased more than 3.3 million, reaching a post-World War peak of 6.3 million. Although job prospects for the long-term unemployed remain grim, the last two months’ BLS reports suggest there may be faint light at the end of the tunnel.