Despite Employment Perils, US Is Finally Hiring -- for These Jobs

The jobs may finally be coming back.

After a financial crisis and recession that knocked more than 8.5 million people out of work and a faltering economic recovery that couldn't even produce enough new jobs to employ graduates and other new entrants to the labor force, the U.S. private sector last month created jobs at a healthy pace.

Non-farm payrolls increased by 192,000 in February, the Labor Department reported today. And while budget-strapped state and local governments continued to issue pink slips at an alarming rate, the private sector added 220,000 new posts.

The unemployment rate edged lower, to 8.9 percent from 9 percent in January, and that's down from 9.7 percent in February 2010.

But getting the unemployment rate significantly lower could take a long time.

The official tally of unemployed stands at 13.7 million people, and another 2.7 million jobless aren't included in that count because they're not currently looking for work. Among those, more than 1 million are so-called discouraged workers, who stopped looking because they believe no jobs are available for them.

"The steep decline in the unemployment rate and the overall trend of economic data in recent months has been encouraging, but there is still considerable work to do to replace the jobs lost in the downturn," said Austan Goolsbee, chairman of President Barack Obama's Council of Economic Advisers.

"The monthly employment and unemployment numbers are volatile, and employment estimates are subject to substantial revision," Goolsbee added. "Therefore, as the administration always stresses, it is important not to read too much into any one monthly report."

There are good reasons to be cautious, not the least of which is that less than a year ago most economists and the Obama administration pronounced the labor market healed. In the months that followed, the pace of layoffs exceeded hiring, and the Republican victories in last fall's elections were in no small part the result of that reversal.

The hiring last month took place across a spectrum of industries -- from manufacturing and construction to business services, health care, hotels and restaurants. However, threats to the economy haven't gone away. Among the perils are high oil prices, fueled by unrest in the Middle East.

But a more immediate risk comes from the fiscal vice gripping federal and state governments struggling to close yawning budget gaps with massive spending cuts.

Most politically independent economists, for example, say the huge cuts envisioned by the budget bill that Republicans recently passed in the House could slam the brakes on economic growth and put at risk hundreds of thousands of jobs.

Goolsbee, who credited administration policies for nourishing the jobs growth reported today, made clear that the White House will fight that bill and use the employment situation as its primary argument.

"We will continue to work with Congress to find ways to reduce spending, but not at the expense of derailing progress in the job market, making the investments we need to educate our workers, investing in science and building the infrastructure our companies need to succeed," he said.

Senate Republican Leader Mitch McConnell, pushing the case for spending cuts on the floor of the Senate this morning, argued that cutting spending will boost hiring and that the American people share his point of view.

"They want to cut spending to help create a better environment for job creation," McConnell said.

But an analysis of the House Republican plan by Goldman Sachs said it could slow economic growth this year by up to 2 percentage points. A separate analysis from Mark Zandi, the respected chief economist of Moody's Analytics, said it could lead to the loss of 700,000 jobs. And Federal Reserve Chairman Ben Bernanke this week said the plan would counteract the Fed's efforts to boost job growth.

Regardless of how the budget debate goes, though, today's numbers are good news, if tempered by the fact that even a healthy pace of hiring like February's will take years to return the country to normal employment levels.

The hiring last month was widespread. Here's a rundown of the sectors adding a significant number of new workers:

• Manufacturing. Factories making wood products, fabricated metals, machinery, computers and peripheral equipment, transportation equipment and food products all saw enough demand for their wares to take on new workers.
• Construction. The weakest hiring sector in the wake of home and commercial real estate meltdowns could be recovering. The pace of claims for unemployment insurance from construction workers has been dropping. And last month the industry added a net 33,000 new jobs. Especially strong were specialty trade contractors that handle concrete pouring, plumbing, painting, electrical work and the like. And that was true for both residential and business construction.
• Wholesale trade. The wholesale establishments that supply supermarkets, department stores, gas stations, universities and even government agencies were a strong source of new jobs. The transportation industries that delivered those goods were also hiring, especially the trucking sector.
• Professional and business services. Firms that design and service computer systems, architectural and engineering companies, and the waste services sector all took on new workers.
• Employment services. The massive unemployment of recent years has, ironically, bred its own job creation. But that's a double-edged sword: Temporary help services remained a strong source of hiring, which means many employers may still be too wary to offer permanent commitments.
• Health care and social services. The health care industry was among the most resilient during the jobs recession, and now it's strong. Among the big sub-sectors hiring were ambulatory care services and home health care services, as well as nursing and residential care facilities.
• Leisure and hospitality. Jobs could be found last month in the performing arts and spectator sports sectors, while new workers were needed by hotels, restaurants and bars.