More reason for economic optimism

What happened

A third straight month of large employment gains gave renewed hope this week that an economic recovery dogged by false starts might finally be taking root. The economy added 227,000 jobs in February, according to a better-than-expected report from the Labor Department, and growth in December and January was revised upward by a combined 61,000 jobs. It was the 17th straight month that employment rolls showed increases, and the third month in a row that the economy added more than 200,000 jobs, bringing the total number of private-sector jobs added over the past two years to 3.9 million. The unemployment rate stayed unchanged at 8.3 percent, largely because half a million workers rejoined the labor force. The only real debate now among economists, said Justin Wolfers of Princeton University, “is whether the economy is recovering or recovering strongly.”

The job gains were spread widely across the economy, including in manufacturing (31,000), health care (61,000), and business services (82,000). President Obama hailed the surge in hiring, which will boost his chances of re-election if it lasts until November. “There are better days ahead,” President Obama said. “Our job now is to keep this economic engine churning.”

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What the editorials said

“So has America finally turned the corner?” asked the Financial Times. The evidence remains mixed. Compared with past recoveries, when job gains surpassed 400,000 a month, the recent upsurge in hiring is actually quite modest. And let’s not forget that last spring, the U.S. economy also enjoyed three consecutive months of job gains over 200,000, only to have that hopeful recovery “killed in its tracks,” partly because of higher oil prices. Another oil shock, a euro debt bombshell, or a conflict with Iran could yet derail this vulnerable economic upturn.

Congress’s refusal to aid the recovery poses another threat, said The New York Times. The federal highway bill, a “prodigious job creator” that would put people to work on the nation’s crumbling highways, is stalled in the House. Republicans continue to demand deep cuts to federal spending, even though a repeat of last year’s budget fights “could hobble business and consumer confidence” at a particularly sensitive economic moment. The latest employment signs are encouraging, but there’s “a lot more climbing to do.”

What the columnists said

This is no “false spring,” said James Surowiecki in The New Yorker. A prime piece of evidence is that “Americans are buying new cars again.” Car sales in February were up nearly 16 percent over last year, which is pushing factories and other businesses to add jobs. When the millions of 20-something Americans who have had to live with their parents for the past few years get jobs and begin to move out, we can expect a spike in demand for not just housing, but all the other “stuff that you put in a house.” The creation of new households could start “a virtuous cycle” that really gets the economy humming.

Has anyone noticed that “something about the U.S. economy isn’t adding up”? asked Jon Hilsenrath in The Wall Street Journal. Even though unemployment has fallen over the past year, the economy itself is “barely growing.” Many economists now believe that economic growth will be about 2 percent in the first three months of this year, down from 3 percent in the last quarter of 2011. That’s not normal, because job growth and GDP usually rise together. And that could mean “job growth will slow in coming months,” said David Leonhardt in The New York Times. Many economists, in fact, are predicting that as companies see revenues leveling off, hiring for the rest of the year may slow to 140,000 to 180,000 new jobs a month.

That’s the last thing Obama wants to hear, said Josh Boak in Politico.com. If job creation slows at the height of the presidential campaign, and the unemployment rate stays near 8.3 percent, it will give new life to Republican charges that Obama’s policies impeded a natural, cyclical recovery. Voters are sick and tired of lean times. With recent job reports creating “rising expectations” of a full recovery, Obama can’t afford a letdown.