We created 192,000 headline jobs in the February employment report. It’s not enough, but it certainly is welcome news and it is heading in the right direction — although too slowly.
We also learned from the February report that the unemployment rate finally trended below the psychologically important 9 percent mark. This is a very big development, considering the rate was pushing the 10 percent level several months ago.
Upon closer scrutiny though, there is another factor contributing to the drop that is not necessarily good news: The official size of the U.S. labor force is shrinking.
So the workforce shrunk. That’s an interesting stat because it bears out what I’ve been saying all along. As people fall off the unemployment rolls, the rate will go down, which is why in this downturn you’re hearing people finally address the “real unemployment rate” which includes an estimate of people who not only are unemployed, but people who have stopped looking for work or have stopped collecting benefits, and that number hovers anywhere from 17% to 20%.
8.9% is definitely good news. I’m not even attempting to downplay that. It just doesn’t tell the whole story, that’s all.