A 7.7% unemployment rate: Is the economy back?

A help wanted sign is posted outside of a Japanese restaurant on February 7, 2013 in San Francisco, Calif.

The Bureau of Labor Statistics reported this morning that the economy added 236,000 jobs in February, with the unemployment rate falling to 7.7 percent. That's lowest jobless rate since 2008, but where does this leave us in the economic recovery?

"Amazingly, it turns out that American business doesn't pay too much attention to...Washington -- who knew?" joked Reuters' finance reporter Felix Salmon. "I doubt we're going to see uncertainty-related jobs slow down, if you will."

On the other hand, Salmon said he agrees with worries that the sequester will cut into job growth.

"I think it's going to be a little more of a wildcard...because the government agencies don't have to start layoffs right away...they can wait until the end of the fiscal year," said New York Times economics reporter Catherine Rampell. "And I think that a lot of the federal agencies are sort of assuming that Congress might actually decide to wash away what's currently in law as the sequester, so they're holding their breath."

Salmon and Rampell have some tips for good #longreads over the weekend.

Felix Salmon recommends:

And Catherine Rampell suggests:

About the author

Kai Ryssdal is the host and senior editor of Marketplace, public radio’s program on business and the economy.
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I sure hope Felix is correct when he backs in to an answer of "things have got to get better from here... there's way too much money in the economy for them not to". But there's been tons of money floating around, but not enough of it going to hire more full time folks. I keep hearing about this new economy stuff which I don't understand. I mean, like it use to be if companies had money to invest they would do it, but it sounds like companies are just hoarding now... afraid of another down turn.

Government money at work. Everyone I know who is working full time is either working directly or indirectly (Think healthcare here) due to money from taxpayers.

More jobs are all good but I would prefer to see total salaries added instead of total jobs. I have been a recruiter in the semiconductor industry for over 10 years and I see about 1 job created for every 4 lost. For example, Austin Texas may appear to be booming but the best numbers I have seen show that Austin has lost 20% of it's high tech jobs since 2000 yet a casual sample of job postings there may lead one to believe the job market there is growing there like never before, which could be likened to a corn farmer exulting over the great crop he finally harvested after 5 years of drought without bothering to note that the crop he harvested 10 years ago was 20% bigger than his most recent. So, did these 20,o00 high paying jobs that actually produced products the rest of the world buys jobs lead to 20,000 higher paying jobs? The simple answer is, No, rather they lead to a bunch of previously well paid people starting "small businesses" like electronic greeting card companies or discount tire stores, jobs that pay half as much and don't contribute anything to American exports. I could be wrong, but I would guess that over the last 10 years the rest of American industry (notwithstanding healthcare) has lost 20% of high paying jobs to jobs with low pay and marginal benefits that are only one step above being unemployed altogether.

It leaves us still in the employment doldrums:

- 01/13 Labor participation rate: 63.6%
- 01/13 # of people not in the labor force: 89.008M
- 02/13 Labor participation rate: 63.5%
- 02/13 # of people not in the labor force: 89.304M

That's about 300,000 people who vanished from the work force last month, while the size of the labor force itself *shrank.*

Moreover, the long-term unemployed still account for 40% of all unemployed people. So, the true unemployment is likely 11.8%, not the 7.7% rate just reported by the government for February. Underemployment is likely closer to 18.0% than the government's reported U-6 figure of 14.3%.

Worse, the precursors to higher employment — full-time hours and temp hours worked — were flat last month.

Without more good jobs — those that pay $20/hr or more in actual wages — the economy's going nowhere, unless the sequester cuts slam us back into outright recesssion/depression.

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