Good news on unemployment?

The national unemployment rate dropped to 8.9 percent last month. This marks the first time the rate has dipped below 9 percent since April 2009.

According the the Bureau of Labor Statistics, the US economy added about 192,000 net jobs in February, up from 63,000 the month before. The private sector added more than 220,000 jobs, which was partially offset by declines in state and local government.

New jobs reduced the number of unemployed, but also increased labor force participation rates.  The labor force increase suggests some unemployed people are feeling better about their job prospects, and are no longer ‘discouraged’ (see previous post for more on discouraged workers), thus re-starting their job hunts.

Gains were seen across industries, led by manufacturing, construction, and professional and business services industries. Declining revenues continue to plague state and local governments, however, forcing layoffs and tempering the labor market recovery. Since September 2008 local governments across the country have eliminated 377,000 jobs.

Good news? Sorta. Although the job market is getting better, it’s still not adding jobs at a fast enough rate to significantly reduce unemployment. Over all, the US employment total still remains more than 7.3 million less than it was at start of the Great Recession in late 2007. Adding jobs at the current clip means 2 and a half more years until the 2007 levels are reached again. Meanwhile, the labor force continues to grow, making unemployment rate reduction even more challenging.

How do the numbers compare to previous times? The above chart–from the US Bureau of Labor Statistics–shows monthly employment changes since 1990. The Great Recessions’ impacts on job losses are dramatic. But looking at recent job growth numbers, they remain well below the robust times of the mid- and late-1990s, and still below the remarkably unspectacular job growth in the mid 2000s. Takeaway message: while the recovery is underway, it’s gonna be slow. Policy has a role in help speeding up the recovery.

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