Companies Hire 236,000 in February, But Long-Term Unemployment Unchanged
In February, 236,000 new jobs were added to the economy, which was higher than expected and the unemployment rate dropped by 0.1 percent. But the 7.7 percent unemployment rate — the official unemployment rate — is only a small part of the picture. Our own monthly reckoning of unemployment rate — what we call U-7 — is a more inclusive take on the underemployment and unemployment rate in America.
U-7 includes everyone in the government’s U-3: everyone who said they wanted a job and had looked for one in the past four weeks.
It also adds everyone who said they wanted one, hadn’t looked in the past four weeks, but had in the past year. (These people are included in the government’s most inclusive statistic, U-6).
But we also add people who hadn’t looked in the past year but still said they wanted a job and would take one. Finally, we add people working part-time, but say they are looking for full-time work, like “consultants” I know for example, who may have worked only one hour during the week and are still tallied as officially “employed.”
The U-7 ticked down only slightly from 16.53 percent to 16.46 percent. So it’s going in the right direction.
But we still count nearly 27 million Americans as either wanting a job because they say so, or are working part-time, but looking for full-time work.
The official unemployment rate, or U-3 went down for whites (6.8 percent), according to the Bureau of Labor Statistics (BLS) data and press release, but “the rates for adult men (7.1 percent), adult women (7.0 percent), teenagers (25.1 percent), blacks (13.8 percent) and Hispanics (9.6 percent) showed little or no change.”
Furthermore, the BLS reported, “the number of long-term unemployed (those jobless for 27 weeks or more) was about unchanged at 4.8 million. These individuals accounted for
40.2 percent of the unemployed.”
Here is the bottom line: the economy is clearly improving. But today’s numbers in no way resolve the larger and critical debate between the “structuralists” who say that high unemployment is here to stay as American jobs give way to technology and foreign workers, and the “cyclicalists” who say we’ll return to “full-employment,” or 4-5 percent unemployment rate, when the economy fully revives.
Here’s how February’s job numbers are being interpreted by the other news organizations:
The Wall Street Journal: “U.S. Jobless Rate Lowest in Four Years”
The New York Times: “U.S. Gains 236,000 Jobs; Unemployment at 4-Year Low“
- Bloomberg.com: “Payrolls Rise as U.S. Jobless Rate Reaches Four-Year Low“
This entry is cross-posted on the Making Sen$e page, where correspondent Paul Solman answers your economic and business questions