BUREAU OF LABOR STATISTICS, DAILY REPORT, MONDAY, MARCH 11, 2002: Providing the strongest evidence so far that the U.S. economy is pulling out of recession, U.S. employers added 66,000 workers to nonfarm payrolls in February, on a seasonally adjusted basis, according to figures released by the Bureau of Labor Statistics. It was the first job growth since last July. The civilian unemployment rate edged down 0.1 percentage point to 5.5 percent in February, leaving it 0.3 percentage point below what could turn out to be the recession's peak level of 5.8 percent posted last December. "This economy is much more resilient than most people thought it was," says Bank One Chief Economist Diane Swonk (Daily Labor Report, page D-1).
The nation's job market improved last month as companies added more workers than they cut for the first time in 7 months, nudging the jobless rate down and providing another sign that the U.S. economy is rapidly turning around. The nation's unemployment rate unexpectedly fell to 5.5 percent, down only slightly from January's 5.6 percent but more noticeably below the recent peak of 5.8 percent reached in December, the Labor Department reported yesterday. Most analysts had thought the jobless rate might go up rather than down because a majority of employers are likely to be cautious in rehiring workers laid off during last year's recession. But last month the number of workers on private and government payrolls rose by 66,000, the first increase in several months and the largest gain since the recession began a year ago. The rising number of jobs in construction, retail trade, services and government more than offset another 50,000-job drop in factory payrolls (John M. Berry, The Washington Post, March 9, page E1). Companies added workers to their payrolls in February for the first time in 9 months, the government said yesterday, the strongest evidence yet that the economy is emerging from the recession. With consumer spending continuing to increase and service companies hiring workers, the economy created 66,000 jobs last month, and the unemployment rate fell to 5.5 percent from 5.6 percent in January, according to the Labor Department's seasonally adjusted numbers. Airlines added employees in February for the first time since May, and hospitals and medical offices continued to show strong growth. Temporary-help agencies, often a leading indicator of the economy's health, ended a 16-month streak of cutting employment. While manufacturing, the sector hardest hit by the downturn, continued to pare jobs, the loss was the smallest since late 2000 (David Leonhardt, The New York Times, March 9, page B1). The job market's 7-month collapse appears to be over, adding to growing optimism about an economic recovery. In recent weeks, the consensus among economists has been that unemployment would continue to rise, even as economic growth returns. But on Friday, the Labor Department threw a curve ball: Employers added 66,000 more jobs in February than they cut, the first gain since July and the most sizable gain since February 2001 (The Wall Street Journal, page A2). U.S. wholesalers pared back inventories for the 8th consecutive month in January, while sales posted their largest rise since June 2000, the government said Monday in a report showing further signs an economic recovery may be underway. The Commerce Department said stocks of unsold goods on wholesalers' shelves fell 0.2 percent in January, to $287.7 billion after falling a revised 0.5 percent in December. The dip in Inventory levels was slightly smaller than the 0.4 percent drop expected by analysts (Reuters, http://www.washingtonpost.com/wp-dyn/articles/A7597-2002Mar11.html). The U.S. economy is breaking out of recession with unexpected speed and may grow at a 3.7 percent rate in the second half of this year, according to the Blue Chip Economic Indicators survey. The consensus forecast calls for gross domestic product to increase in the first quarter of this year at a 2.6 percent annual rate, compared with 1.6 percent in last month's forecast. The most optimistic economists said first-quarter growth would exceed 4 percent, the fastest pace in almost 2 years. The economy grew at a 1.4 percent rate in the fourth quarter of 2001 (http://www.latimes.com/business/la-000017929mar11.story?coll=la%2Dheadlines %2Dbusiness). In another sign that the economic slump may be easing, announced job cuts hit their lowest level in 8 months, according to the Chicago-based outplacement firm Challenger, Gray & Christmas, which has tracked job cuts since 1993. Still, the six-figure job cuts underscore what many economists have been warning: Unemployment will get worse before it gets better. The rate, currently at 5.6 percent, is expected to top out at 6 or 6.5 percent by the middle of the year. Telecommunications was the industry hardest hit in February, with nearly 36,000 planned cuts (http://www.csmonitor.com/2002/0311/p16s01-wmgn.html). DUE OUT TOMORROW: Multifactor Productivity Trends, 2000
<<application/ms-tnef>>
