Unemployment rate stays steady, despite snowstorms

March 06, 2010|By Don Lee | Tribune Newspapers

WASHINGTON — — In a pinch of bright news for the economy, the East Coast snowstorms that paralyzed transportation and shut down thousands of businesses last month did far less damage than expected to the nation's labor market, allowing the unemployment rate to hold steady at 9.7 percent.

Some economists had forecast that the storms would result in a setback on the jobs front, with unemployment jumping and payroll losses reaching 75,000 or more.

Certainly, the recovery remains slow and uneven after the worst recession in more than a half-century. And by any standard, the number of people out of work for six months or longer remains high: Four out of 10 unemployed, or 6.1 million workers, fall into this category.

But in February, the nation's payrolls fell by only 36,000, the Labor Department reported Friday, and some analysts said the economy might have added jobs were it not for the bad weather that shut down businesses and transportation for several days in the Mid-Atlantic region.

Revised data said the economy shed 26,000 jobs in January and 109,000 in December, when the unemployment rate was 10 percent.

Including February, payrolls have fallen in 25 out of the past 26 months.

"The job market appears to be on the mend, even though it's a fairly slow process," said Gary Burtless, a former Labor Department economist and now senior fellow at the Brookings Institution in Washington. In particular, Burtless was encouraged that the number of long-term unemployed declined slightly last month after a long string of rapid increases.

On balance, professional forecasters are expecting economic growth to drop to about 3 percent in the first quarter and for the balance of the year - a relatively slow pace that won't add much fuel to hiring.

Employers have been reluctant to hire because of weak sales, tight credit that's restrained expansion, increased productivity - more goods from current workers - and uncertainties about government policies on health care, energy and taxes.

All that has prompted fears that the broader economy could backslide.

"In terms of self-sustaining growth in the economy, it's hard to see how you can do that without creating jobs," said Dean Baker, director of the Center for Economic and Policy Research in Washington.

Despite the better-than-expected employment report for February, he noted, the economy needs to add some 125,000 jobs just to keep pace with the labor growth and hold the jobless rate from rising.

The United States has lost 8.4 million jobs since December 2007.

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