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March 11, 2006

The February Employment Report: Looks Good To Me

I confess.  Before yesterday's report on nonfarm payroll employment growth for February, I was betting that the statistics would come in weaker than expected.  I really had no good reason for this belief -- just a fatalistic sense that, surely, the data would continue to confuse us.

Doesn't look that way to me now. Solid growth, broad-based:



It's true that the estimates of nonfarm payroll growth for December and January were revised downward, and the unemployment rate actually rose.  But not by much.  From TheStreet.com:

February payroll additions were above the 210,000-job consensus of economists, although the upside was moderated by an 18,000-job downward revision to January and December's numbers. The unemployment rate rose to 4.8% from 4.7% in January, and average hourly wages grew by 0.3%.

Kash pgl notes that the unemployment figure is related to an increase in the labor force participation rate. but like the jobless rate itself, the change is barely noticeable:


Of course, we should always be careful about reading too much into a single month's data -- head over to Mark Thoma's place to see the current numbers in a longer-run perspective.  But here are two views on the February report as a whole: Barry Ritholtz says it's a "fair report. Not terrible, but not great."  William Polley, on the other hand, says "It is very good news." I'm with William.

If you are interested, here are the powerpoint slides from the pictures above, and more:
Download Employment_Slides_3.10.06.ppt

UPDATE: Jim Hamilton thinks the employment report is "another indication that the economy is recovering nicely from the bump in the road we encountered last quarter."  (And he helps me out by giving the heads up on a mislabeling of the original participation rate graph -- which I have corrected.  I also fixed it in the downloadable powerpoint file.)

March 11, 2006 in Data Releases , Labor Markets | Permalink


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Listed below are links to blogs that reference The February Employment Report: Looks Good To Me :

» The latest employment figures: implications for policy from Econbrowser
Stronger employment growth in February than I and many others had been expecting. [Read More]

Tracked on Mar 11, 2006 11:31:27 PM

» The latest employment figures: implications for policy from Econbrowser
Stronger employment growth in February than I and many others had been expecting. [Read More]

Tracked on Mar 12, 2006 9:28:23 AM


One of my eagle-eyed readers noted (when I reproduced the above participation graph) that the ".5" labels are missing on the vertical axis.

Posted by: James Hamilton | March 12, 2006 at 09:12 AM

Thanks Jim -- All better now.

Posted by: Dave Altig | March 12, 2006 at 10:18 AM

Your slides would be smaller and more accessible if you turned them into Flash, specifically a clickthrough SWF series -- just open the ppt file in OpenOffice, and choose File / Export / Macromedia Flash (SWF) as the format. The result is no longer easily editted, but it's 47K rather than 150 (not a big deal) and your readers can view it within their browsers without a download. (If they have Flash. Most do.)

Posted by: Tom Myers | March 12, 2006 at 11:30 AM

Tom --

Thanks -- from now on when I post something I'll do it both ways. (I've found that some readers like to use the slides for their own purposes -- and I am to be a full service guy).

Posted by: Dave Altig | March 12, 2006 at 02:07 PM

Kash normally does the employment report but this time, it was yours truly.

Posted by: pgl | March 12, 2006 at 02:46 PM

pgl -- sorry. I must have been sleepy.

Posted by: Dave Altig | March 14, 2006 at 04:22 PM

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