Friday, March 6, 2015

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US Economy Added 295000 Jobs in February; Unemployment Rate at 5.5% - New York Times




Cutting and removing ice from East Lake Winona in Winona, Minn., last month. Economists have been generally positive about the state of the nation’s recovery from the recession. Andrew Link/Winona Daily News, via Associated Press

The Labor Department reported on Friday that employers added 295,000 workers to their payrolls in February and that unemployment fell to 5.5 percent.


The report was a big improvement from January’s, when employment rose to a newly revised 239,000 jobs and the unemployment rate was 5.7 percent.


Economists were generally positive about the state of the nation’s recovery from the recession, despite its relatively sluggish pace.


“While there are a lot of risks out there, it feels less risky than in the past 25 to 30 years,” Mark Zandi, chief economist for Moody’s Analytics, said before Friday’s release. “It feels really, really good out there.”



Analysts’ expectations had called for about 230,000 new jobs and for a slight decline in the unemployment rate, which ticked up slightly to 5.7 percent in January.



One consistently dark patch in the recovery has been the sluggish growth of wages. In February, wages rose 0.1 percent, according to the Labor Department. Average hourly wages for private-sector workers have been rising slowly, at around 2 percent, for the last few years.


Slow wage growth has helped prevent the economy from returning to its potential, making many Americans feel as if the recovery has left them behind.


“Everyone knows of someone who has been laid off or has a friend or relative who has been laid off,” said Gary Chaison, professor of industrial relations at Clark University. “We hear we’re on the road to recovery, but people aren’t convinced of that.”


Still, many economists have a sunnier outlook, expecting wages to finally start to increase at a faster pace this year as the job market tightens.


“We’re facing a turning point, and we’re going to see more pressure on wages,” said Tara Sinclair, chief economist at the job search site Indeed.com.


Strikes at refineries, a work stoppage at West Coast ports and the unusually snowy weather on the East Coast may have affected the economy last month, and many consumers stayed home. Those factors were likely to put a modest dent in February’s employment data, even though it is adjusted for normal seasonal variations.


“Retailers are selling salt but not much of anything else, because people are hibernating,” said Diane Swonk, chief economist at Mesirow Financial.


The anomalies in recent labor data are one reason the Federal Reserve would have trouble looking to February’s numbers as a guide for when to start raising interest rates to keep inflation at bay.



“Unless you come out with an absolutely booming number, it really complicates timing for the Fed,” Ms. Swonk said. “It’s just noise.”


At a conference this week, Mr. Zandi of Moody’s said current wage growth data appeared gloomier than the underlying reality, in part because of demographic factors. As well-paid baby boomers enter retirement, to be replaced by younger workers starting out at lower salaries, he said, the overall wage pattern has tilted slightly lower.


But there is growing evidence, he said, that an improvement is underway. One indication is the growing number of younger workers changing jobs as they gain more confidence in their prospects. On average, workers who switch jobs get a 14 percent pay increase in their new salaries.


Paradoxically, Mr. Zandi cited the labor dispute at West Coast ports and strikes at refineries as good news for the economy.


“You don’t see those kinds of actions in a labor market that’s weakening,” Mr. Zandi said.


Another positive sign for wages is coming from the retail sector. Last month, Walmart said it planned to raise its minimum hourly pay to $9 and lift it to $10 next year. TJX Companies, which owns Marshalls and T.J. Maxx, announced similar raises.


But labor advocates like the National Employment Law Project say retailers should also be focusing on adding hours as well as lifting pay for some workers. The group said that retail workers make up 11 percent of working adults but that 18 percent of those who are working part time would rather be employed full time. Many who want more hours are women from minority groups.


“In addition to paying a fair wage, retailers like Walmart need to provide their work force with stable hours and predictable schedules that allow people to pay their bills, plan their lives and care for loved ones,” Christine Owens, executive director of the National Employment Law Project, said in a release this week.


Shannon Henderson, 29, works part time in customer service at a Walmart store in Sacramento, and she supports two children with her $10-an-hour wages. Her hours are unpredictable, often interfering with her breast-feeding schedule for her 9-month-old. She wants to work more but said the company did not have more full-time positions.


If Ms. Henderson worked full time, she said, she might be able to afford a car. For now, she said, “I don’t make enough money.”









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