It would be nice if there were a clear dividing line between economic contraction and expansion, but that doesn’t seem to be happening. Data remains mixed. Still it looks as if the economy is starting to heat up as the weather does.
Today the Bureau of Labor Statistics announced that in February the economy lost 36,000 jobs, 10,000 more job losses compared to January, yet the nation’s unemployment rate stayed steady at 9.7%. Due to the bad snow storms that hit the East Coast the number was expected to be worse. The picture varies widely according to the sector. In the month 47,500 temporary workerss were hired. This is a good sign since these jobs often become permanent. Since the year began, 100,000 temp workers have been hired.
In construction however, unemployment is now at 27.1%, up from 24.7% in January reflecting a monthly loss of 64,000. The underemployment rate of those who could only find part time work, rose 16.8% up from 16.5% in January. The change led to a drop in the average work week to 33.8 hours. Still the pace of job loss slowed to the smallest number since the official start of the recession in December 2007.
In responding to the news, President Barack Obama said today that the job losses are “more than we should tolerate.” He called on Congress to address the matter. This week the president signed a bill extending unemployment benefits for a month after Senator Jim Bunning dropped his filibuster in opposition to the legislation .
On Thursday in an attempt prime the jobs pump, the House of Representatives passed a $15 billion employment program. The Senate is due to vote on the bill next week. The legislation has a number of provisions designed to increase hiring such as:
- Exempting employers from paying Social Security taxes on new hires who were unemployed
- A tax break to businesses for capital improvements
- Additional funding for highway, transit, and capital construction projects for states and cities
In January according to the Federal Reserve Bank total consumer borrowing rose by a seasonally adjusted $5 billion for the first expansion in a year. The increase was not in revolving credit like credit cards but rather in student, personal and auto loans which rose at a 5% annual rate. The numbers do not include any real estate loans.
In February retail same store sales grew by 4%overall according to Thomson Reuters, which looks at 30 major chains. It was the strongest gain since November 2007. Ford Motors leapt in first place in auto sales with a 43% gain selling 142,006 sales for the month, about 300 more than GM while Toyota’s woes take their toll.
The economic news played well on Wall Street.Today, the Dow Jones Industrial Average soared 122.06 points today, up 1.2%, to 10566.20, for its best one day gain since February16th