The economy rallies: Unemployment drops but recovery is mixed
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The announcement Friday by the U.S. Bureau of Labor Statistics that the economy had created 236,000 new jobs in February, pulling the unemployment rate down from 7.9 percent to 7.7 percent, was good news taken by itself.
The economy needs 150,000 new jobs per month to absorb new entries to the work force, so the higher figure, reflecting now three solid years of job growth, was helpful. The downside was that the drop in the unemployment rate reflected also a lower rate of participation of Americans in the economy, a drop of 130,000 workers, to a level that was the lowest since December 2008, the last month of the Bush administration.
But there are other bright spots on the American economic horizon. There appears to be some recovery in the housing market, a key sector and one that was at the center of the collapse through bankers' subprime mortgage and other malfeasance that sparked the recession and the need for bailouts of recent years. Another encouraging feature of the performance of the economy was the stock market's improvement, with the Dow-Jones Industrial average soaring to over 14,000.
On the other side of the ledger, America still has an estimated 9 million job deficit and growth for 2013 continues to be predicted to run lower than 2 percent, not as bad as some European countries' but still feeble compared to China, India and many other countries.
Perhaps worst over the long term is the growing chasm between the situation of American workers and that of the cash-fat companies that employ them. The companies in general aren't hiring, except overseas, pushing productivity gains instead.
February's job figures, of course, did not include sequestration, the federal government's inaction that has let $85 billion be cut mindlessly from its expenditures, beginning March 1 to be completed by Sept. 30 absent agreement among Washington players, Republicans and Democrats, House and Senate and the White House, to reassume rational control of America's expenditures.
February's positive job figures and the Dow-Jones rise indicated that the economy either didn't pay much attention to what was happening in Washington or falsely assumed that America's squabbling leaders would act to prevent the sequestration. Given the irresponsibility that appears to be the driving characteristic of Washington, Americans can only hope the economy will continue to steam ahead, whatever the governing geniuses do or don't do.
First Published March 12, 2013 12:00 am