Economy Watch: Employment Up Ahead of Sequester
- Mar 11, 2013
In creating 236,000 jobs in February, as the Bureau of Labor Statistics reported on Friday, the economy surprised on the upside, since some economists had fretted that the looming sequester might have made employers nervous. But apparently it didn’t; professional and business services added 73,000 jobs in February, after changing much less (up 16,000) in January, while construction employment jumped by 48,000, with many of those jobs (15,000) in residential specialty trades.
The healthcare industry also continued to add jobs in February (up 32,000), as did retail businesses. In February, retailers added 24,000 jobs, roughly in line with the addition by retailer of 252,000 jobs over the past 12 months. Employment also continued to trend up over the month in food services and drinking places and in wholesale trade.
The official unemployment rate edged down to 7.7 percent, which is the lowest in four years (and it was headed upward in those days). The February rate is closer to the Federal Reserve’s goal of 6 percent unemployment—at which time the central bank might consider raising interest rates—but that rate is still a long way off, unless the economy consistently creates as many jobs as it did in February for the rest of the year and beyond.
The BLS also reported that its U-6 unemployment rate also edged down from 14.4 percent to 14.3 percent in February. U-6 is the number sometimes cited as an alternate to official unemployment numbers by those who believe the official rate understates the employment problem. The U-6 includes all the people not counted by the official rate—those who have given up looking for work, along with those working part time but who want full time jobs. It’s been inching downward during the recovery, just as the official rate has.
Intermodal shipping spikes in February
The Association of American Railroads (AAR) reported on Friday that an indirect indicator of U.S. economic activity, intermodal traffic, totaled more than 983,000 containers and trailers nationwide in February, up 10.5 percent compared with the same month a year earlier. That percentage increase represents the largest year-over-year monthly gain since December 2010, according to the organization.
The AAR also said that the weekly average of 245,770 intermodal units in February was the highest weekly average for any February in history. “Shippers find intermodal appealing for a lot of reasons,” noted AAR senior vice president John T. Gray in a press statement. “[That includes] fuel savings, higher trucking costs and service that has become much better in recent years.”
As for commodities not shipped in intermodal containers, carloads originated in February totaled were down 1.1 percent compared with the same month last year. Excluding coal and grain, however, carloads were up 4.5 percent year-over-year in February 2013.
Wall Street seemed moderately happy about the positive jobs numbers on Friday, with the Dow Jones Industrial Average up 67.58 points, or 0.47 percent. The S&P 500 gained 0.45 percent and the Nasdaq advanced 0.38 percent.