The U.S. economy continued its recovery and added 227,000 jobs in February, according to the Bureau of Labor and Statistics. This topped expected gains of 210,000 and sent stocks up at the opening bell on Friday. Though this is great news, there are some troublesome trends that should not be overlooked.
Though the report was better than expected, the amount of job cuts last month was still over 51,000, according to a report by outplacement firm Challenger, Gray and Christmas. Last year, the job cuts were mostly in government, this year the cuts are in transportation and consumer goods, a trend that shows no signs of slowing.
Less jobs in these sectors is “worrisome” because they are “strong indicators of economic health,” said John A. Challenger, CEO of the firm.
Professional and businesses services, health care and social assistance, leisure and hospitality, manufacturing, and mining all saw gains the report said.
The number of unemployed persons remained unchanged at 12.8 million, leaving the unemployment rate also unchanged at 8.3%. Of those, 5.4 million are long term unemployed — out of work for 27 weeks or longer — accounting for 42.6% of the total unemployed.
Broken down by race, the unemployment rate is 7.3% for whites, 14.1% for African Americans and 10.7% for Hispanics. Minorities appeared to lose jobs from January and Whites gained marginally.
The employment participation rate went up 20 basis points from January to 63.6% as well, but down 30 basis points from a year ago.
The brighter picture painted by the report also overlooks the unemployment rate among teenagers. Though it improved 50 basis points from January, it is still at 23.7%. With teens seeking summer employment in the coming months, this should improve further but does not appear poised to go below 20% anytime soon.
As long as rising fuel prices lead to layoffs in areas supported by consumer spending, this recovery will not last long. The more money people spend on fuel and goods whose prices rise because of the cost of fuel, the longer the Great Recession drags on.