Boom: Economy added 313,000 new jobs in February

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Published by: Dan Calabrese on Friday March 09th, 2018

Now that's more like it.

We've been raising this caution for years: When the government talks about 100,000 jobs being created in a month, or even 200,000, it sounds like a lot. But the population is always growing, and when you consider the size of the country overall, these numbers really don't represent that impressive a number of new jobs created.

Many economists believe you need to create at least 140,000 a month just to remain at replacement levels and keep up with the growth of the overall population. Others believe you need to create as many as 200,000 to tread water. So when presidents of either party of tried to tout numbers in the 100,000-to-200,000 range, we've tended to throw cold water on it. It's not that we want to be buzzkills. It's that we want people to understand what's good and what isn't good, and to make it clear that the United States of America needs to do considerably better than that if it wants to experience real prosperity.

How much better? Try . . . in the 300,000-to-400,000 range. Then we'll say we've got something going on here.

Well, what do you know? We've got something going on here:

Total nonfarm payroll employment increased by 313,000 in February, and the unemployment rate was unchanged at 4.1 percent, the U.S. Bureau of Labor Statistics reported today. Employment rose in construction, retail trade, professional and business services, manufacturing, financial activities, and mining.

In February, the unemployment rate was 4.1 percent for the fifth consecutive month, and the number of unemployed persons was essentially unchanged at 6.7 million. (See table A-1.)

Among the major worker groups, the unemployment rate for Blacks declined to 6.9 percent in February, while the jobless rates for adult men (3.7 percent), adult women (3.8 percent), teenagers (14.4 percent), Whites (3.7 percent), Asians (2.9 percent), and Hispanics (4.9 percent) showed little change. (See tables A-1, A-2, and A-3.)

The number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged at 1.4 million in February and accounted for 20.7 percent of the unemployed. Over the year, the number of long-term unemployed was down by 369,000. (See table A-12.) The civilian labor force rose by 806,000 in February. The labor force participation rate increased by 0.3 percentage point over the month to 63.0 percent but changed little over the year. (See table A-1.)

In February, total employment, as measured by the household survey, rose by 785,000. The employment-population ratio increased by 0.3 percentage point to 60.4 percent in February, following 4 months of little change. 

Yes, that's a good month. That's a very good month. If we can start to generate that kind of job creation consistently, it will be indicative of an economy that's growing on the supply side, which means that worker productivity is driving the growth and spurring capital formation, which then turns around and provides those same workers with the means to consume the goods that are being produced.

Now, a few caveats:

First, when the U-3 unemployment rate is at 4.1 percent, there's basically nowhere left to get workers aside from those who had previously dropped out of the workforce. That will present some problems for employers looking to hire, because these people need to first be lured back into the job market, and many of them haven't worked for awhile. The economy desperately needs them working because it needs the productivity they can provide, but getting them on board and getting them up to speed won't be that easy.

Second, while this is certainly a hopeful sign that first quarter GDP growth could be dynamite (I'll be disappointed if it's not 4.0 percent or better), the very Trump policies that helped give us this boom is now jeopardized by his tariff decision. That's going to raise the price of sourcing for every manufacturer that uses steel, and it will especially be tough on those trying to sell durable goods like cars and refrigerators.

There are still three weeks left in the first quarter. Until the tariff announcement, there was every reason to think we were headed for the biggest month of GDP growth in recent memory. The February job numbers only seemed to confirm that. Will the tariffs do enough damage in the next three weeks to undermine all the good Trump and his other policies have done?

That's the cloud that hovers over this otherwise wonderful economic news.

Dan writes Christian spiritual warfare novels and does all kinds of other weird things too. Follow all his activity by liking him on Facebook!

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