Payroll Employment Down 36,000; Unemployment Rate Steady at 9.7 Percent

In February, payroll employment fell by 36,000. This followed a downwardly revised decline of 26,000 in January (previously -26,000). This downward revision however, was more that counteracted by an upward revision in November from a loss of 150,000 to a loss of 109,000. Though job losses are continuing, the rate of loss is clearly slowing down and modest increases in payrolls are likely to begin in coming months.

The decline in payrolls was primarily due to a loss of construction jobs, which shed 65,000 over the month. The large snow storms over the month that hit the South and East Coast likely helped drive up construction jobs losses. Service sector jobs rose by 24,000 driven by the private sector. Public sector payrolls declined by 18,000.

Despite continued job losses, the unemployment rate which is measured by a different survey, remained steady at 9.7 percent. Due to the smaller sample size of the unemployment survey, it tends to be more volatile and single month changes often are less meaningful than a multiple month trend. The labor force participation rate, which had fallen sharply for months hitting a 24 year low in December as more workers likely became discouraged rose for the second straight month by 0.1 percent. Over the past two months over 450,000 people rejoined the workforce. As payrolls begin to improve, it is likely that many discouraged workers rejoin the labor force and this will be a damper on lowering the unemployment rate.

	Feb	Jan	Dec	Nov	Oct	Sep
Payroll Change (000s)	-36	-26	-109	64	-224	-225
Goods Producing	-60	-53	-54	-33	-131	-121
Services	24	27	-55	97	-93	-104
Unemployment Rate	9.7	9.7	10.0	10.0	10.1	9.8
Labor Force Participation R.	64.8	64.7	64.6	64.9	65.0	65.1

10.03.05 (Source: Bureau of Labor Statistics)