RAY SUAREZ: The jobs numbers for February offered new signs of hope today that the recovery is gaining some traction. The president pointed to progress, while his opponents said it’s still not nearly good enough.
The U.S. economy has now turned in three of its strongest months of job growth since the recession began. President Obama marked the improvement today in Petersburg, Virginia, at a Rolls-Royce aircraft engine plant.
PRESIDENT BARACK OBAMA: The economy is getting stronger. And when I come to places like this and I see the work that’s being done, it gives me confidence there are better days ahead.
RAY SUAREZ: The Labor Department counted more than 142 million Americans at work in February, the most since January 2009. Employers added a net total of 227,000 jobs, somewhat better than expected.
Overall, the work force has increased by more than 730,000 positions since the beginning of December. The gains have been helped by expanding payrolls in the manufacturing sector, now at their highest since April of 2009. And even the number of underemployed fell below 15 percent for the first time in three years.
Still, the president acknowledged there is much more to do.
BARACK OBAMA: Day by day, we’re creating new jobs. But we can’t stop there, not until everybody who’s out there pounding the pavement, sending out their resumes has a chance to land one of those jobs.
RAY SUAREZ: In fact, half-a-million Americans resumed looking for work in February. For that reason, mainly, the unemployment rate was unchanged at 8.3 percent.
It has now stayed above 8 percent since February of 2009, a month after the president’s inauguration. Republican presidential frontrunner Mitt Romney took note of that fact today, as he had last night in Pascagoula, Miss.
MITT ROMNEY (R): When he became president, he asked us to let him borrow $787 billion. He said, if he got the money, he would keep unemployment below 8 percent. It has not been below 8 percent since. This guy had a lot of things to say, but hasn’t delivered a lot.
RAY SUAREZ: Former House Speaker Newt Gingrich issued a statement about the job numbers. In it, he said, “Any new job is a welcome paycheck for the American worker. But as past recoveries show, the current rate of growth will leave the American economy sputtering for years to come.”
Still, people hunting for work have to hope that other recent signs bode well, with consumer confidence at its highest in a year, and new claims for jobless benefits near a four-year low.
For more on all this, we turn to Lisa Lynch, dean of the Heller School for Social Policy and Management at Brandeis University. She’s a former chief economist at the Labor Department. And Diane Swonk, senior managing director and chief economist for Mesirow Financial, a firm based in Chicago, she joins us tonight from New York City.
Dean Lynch, during 2010, when the economy was struggling to add jobs, we kept having guests on like you who said you can’t look at any one month and say much of anything. But now that we have had three straight months of high growth, a year-and-a-half of net job creation, is it safe to get into the water and start talking about a pattern, something we can really hold on to?
LISA LYNCH, Heller School for Social Policy and Management at Brandies University: I think so, Ray.
When you — as you said, you don’t want to put too much weight on any single month’s worth of data. But it is important to start doing a little bit of addition and looking at what we’re seeing on the employment front, having three very strong months of robust job growth, well beyond the number of jobs we need to keep pace with the growth of the population, on top of 17 months overall of adding jobs every month to the economy.
Seeing the unemployment rate coming down, even as more people are entering if into the labor market, seeing wages increasing, seeing temporary help go up, seeing hours of work go up, all of that added together on top of decreasing unemployment insurance claims data, really suggest that we have turned a significant corner with regards to improvement in the labor market.
RAY SUAREZ: Diane Swonk, you’ve had a look at the numbers. What are your general observations about February 2012?
DIANE SWONK, Mesirow Financial Holdings, Inc.: Well, certainly, it was a good month.
And I agree that the trend has been in the right direction. I would add to what Lisa has already said. And that is that we have seen revisions up. We saw 60,000 more jobs created in the last two months than they initially counted. And they cut the survey in the middle of the month, which means momentum was picking up over the course of the month that they missed.
And that’s been happening for some time now, that they have been revising up the data, instead of revising down the data. So it also suggests that we’re starting to get some more momentum out there.
Separately, it looks like, from the unemployment rate, where they call people up, that is generating much more jobs than we’re getting from where they actually talk to firms, that survey. And those two over time go — sort of get pushed together and they get squared up. And I think what we’re seeing out there is new business creation. New business formation is starting to pick up. There’s other signs of that in the U.S. economy in the payroll reports that we see from other kinds of businesses where newer businesses use payroll services.
We’re seeing small businesses account for 50 percent of the job gains, and that new business formation is really the backbone of a more sustainable recovery going forward.
RAY SUAREZ: So, Diane, what are the areas of concern, then?
DIANE SWONK: The areas of concern are the persistence of how many people are still unemployed and have been unemployed for more than six months. We have got — that percentage actually went up. It went from about 5.5 million to 5.4 million people. So the number went down, but the percentage went up, still over 40 percent.
It was a high of 26 percent in the 1980s recession. So this persistence of long-term unemployment, what we’re seeing is people are quitting their jobs quicker and getting a new job. Younger people are getting jobs more quickly, new entrants into the labor force. But the people who have been left behind by the recession continue to be left behind by the recession.
And that’s who we worry about, because for them every month that they continue to be left behind, the chances of them getting back into the labor force is more diminished.
RAY SUAREZ: Lisa Lynch, at some point, does a virtuous cycle set in? When more people are working, that means more people are spending, and maybe more people are working yet again?
LISA LYNCH: Well, that’s what you hope, that it’s — certainly when you look at the economy, much of the growth in our economy comes from consumer demand.
And consumers can actually actualize that demand when they have money in their pocket. And they need to have jobs and good wages in order to be able to produce — to buy goods that then producers will produce more of.
So, clearly, as we add more jobs to the economy, the unemployment rate drops, this helps feed a virtuous circle. But there are headwinds that one has to worry about undermining that circle, that virtuous circle. So that’s why it’s important that we still have in place the extension of the payroll tax cut. We have extension for the unemployment insurance for those people that are out of work, as Diane mentioned, for long periods of time.
And we have to keep our eyes on other parts of the world that are buying our goods, and in particular Europe, with respect to what their demand for our products is.
RAY SUAREZ: Diane Swonk, with so many people wanting to work more than they are able to work now, with so many people still looking for work, is it too soon for people to be asking for raises? I noticed that the data on raises was not very good.
DIANE SWONK: Well, it is.
I mean, in fact, one of the things we do know is when you run unemployment above 8 percent for such a long period of time — it happened in the 1980s for 38 months. We’re now at 37 months today. You start to have cumulative effects out there.
Even new college grads that are getting jobs today are accepting jobs maybe out of the area that was their expertise. And it can hurt their earning potential going forward. Also, people who accept jobs often that have been out of work accept a job that is at lower pay and with less job security than they had in the past.
And that even undermines, you know, the future in terms of the broader economy and qualifying for a mortgage, for instance. So you are seeing a very unevenness to the improvement. It’s good. We will take it. It’s much better than we have had, and it’s still not enough. And I think that’s very important in understanding out there, is that it still is a very uneven recovery and it is certainly not one that people are popping champagne corks over at this point in time.
RAY SUAREZ: Lisa Lynch, during 2010 and 2011, men were gaining jobs faster than women. But in the last three or four months, that trend has reversed and now it’s strongly women ahead of men. Is that a function of which sectors of the economy are doing well?
LISA LYNCH: Right.
I mean, we see the health care sector and social assistance sectors, like child care, those sectors are adding jobs. Business and professional services are adding jobs. Leisure and hospitality are adding jobs. All of those sectors have a disproportionately higher fraction of women in those sectors.
But we’re also seeing the manufacturing sector adding jobs. And those four sectors together represent the 3.5 million net new jobs that have been added to the economy over the last two years. So we’re going to see a little bouncing around between men and women with respect to the employment gains.
But I think, back to a point that Diane raised earlier, the folks that are really struggling are the folks that have struggled time and time again. Those are people with less than a high school degree. We see unemployment rates for blacks that are double unemployment rates for whites.
So if you’re an unskilled worker out there looking for employment, regardless of whether or not you are male or female, you’re the person that’s really struggling right now to find a job.
RAY SUAREZ: Diane Swonk, quickly, before we go, you heard Lisa Lynch talk about headwinds. What will you be looking for in the coming months to see whether these job growths have legs, whether they can sustain for the rest of 2012?
DIANE SWONK: Well, the first one is, there was a bit of help from the weather. And so the weather did help some of those leisure jobs. We were golfing in — I wasn’t, but I knew people who were golfing in Chicago in January. And that just doesn’t usually happen. And so that did help some of the leisure jobs that we saw there.
But, more importantly, you really want to look for oil prices. Oil prices are the biggest near-term risk. Want to watch that labor force participation. Is the hope going to stay of people throwing their hat back in the ring? That’s really critical. And, most importantly, I think — Lisa already mentioned it — the European — European feeding back through China.
China’s — exports to China are important to us, and they slowed dramatically. Sort of the unannounced news today was that imports outpaced exports almost 2-1. And that’s something that had been the silver lining, exports of heavy manufactured goods in particular, into places like China.
And China uses Europe as one of their largest markets. So the ripple effects of the world economy are very important to us here in the United States. You can’t just take us as an island.
RAY SUAREZ: Diane Swonk and Lisa Lynch, thank you both.
JUDY WOODRUFF: For more on the jobs numbers, check out our website for Paul Solman’s own measure of unemployment, which includes the underemployed and those out of work so long, the government no longer counts them. That’s on our Making Sense page.