The Labor Deparment on Friday reported that the economy added 236,000 jobs in February, bringing the unemployment rate to 7.7 percent, down from 7.9 percent in January. The jobless rate is now at its lowest level since December 2008 — before Barack Obama was sworn in as president.
The report was almost uniformly positive, greatly outpaced analysts' expectations, and bolstered optimism that the labor market could finally escape the years-long pattern of plodding improvement that has so far characterized the economic recovery.
The job growth in February easily trumped the average monthly gain of 183,000 in 2012. The private sector created 246,000 jobs, while the government — at the local, state, and federal levels — shed 10,000 jobs, continuing a trend that could be exacerbated as the country heads for what appears to be a new, Congress-led age of austerity. The manufacturing and construction industries — which have both struggled mightily in the recession's aftermath — added 14,000 and 48,000 positions, respectively, the latest sign that the housing market has recovered from its Great Recession depths.
Optimism gushed in the wake of the report. According to Jeffrey Sparshott and Sarah Portlock at The Wall Street Journal, "The latest snapshot of the labor market comes against a backdrop of an improving housing market, big gains for the stock market, rising consumer confidence, and other signs of momentum for the economy."
"It's an outstanding report," Craig Alexander, chief economist at TD Bank Group, tells The Washington Post. "Not only are the headlines good but the details are good as well. You very quickly run out of superlatives in this payroll report."
Furthermore, it appears the economy has so far been able to withstand the recent expiration of a payroll tax cut, as well as a tax hike for the wealthiest Americans that was enacted as part of the deal to avert the fiscal cliff.
Still, while optimism is spreading, there are some signs that the economy is still fragile. The economy added only 119,000 jobs in January, fewer than initially reported. And February's rate of job growth is barely keeping up with population growth, which means the unemployment rate could remain at elevated levels for some time to come.
But the greatest thundercloud on the horizon is the sequester, $85 billion in spending cuts for the rest of 2013 that went into effect at the beginning of March. Those cuts will likely lead to furloughs and layoffs in the coming months, thrusting thousands more into the ranks of the unemployed.