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With weather fogging the picture, February jobs data provides little clarity

The most recent Employment Situation Summary, released March 7 by the U.S. Bureau of Labor Statistics, revealed that total nonfarm payroll employment increased by 175,000 positions in February, but the national unemployment rate actually rose slightly to 6.7 percent.

For the third straight month, jobs report data did little to encourage economists, investors or lenders that the nation's recovery is continuing at full steam.

The most recent Employment Situation Summary, released March 7 by the U.S. Bureau of Labor Statistics, revealed that total nonfarm payroll employment increased by 175,000 positions in February, but the national unemployment rate actually rose slightly to 6.7 percent. That uptick is attributed to the workforce growth rate's failure to keep up with that of the continually expanding population, according to a HousingWire report, which also noted that the total number of unemployed persons in the U.S. stood at a relatively unchanged 10.5 million through the first two months of 2014.

In the construction sector, approximately 15,000 new positions were added, a modest figure that does little in terms of helping address the need for new housing inventory in many parts of the country. With property value appreciation rates threatening affordability for many prospective buyers, especially in metro markets like the Bay Area, Boston, Los Angeles and San Diego, beginning more new homebuilding projects remains vital to the industry's long-term sustainability. But the approval rate for permits remains relatively tight, building material costs are still high and the harsh winter weather experienced by the Midwest and much of the Northeast throughout December, January and February has hindered the ability of many contractors to start new work and, consequently, make many new hires.

On a macroeconomic scale, the level of emerging market volatility in places such as China and Ukraine, among others, has investors seeking signs of domestic stability. But the weather has not cooperated in terms of producing positive fundamental indicators so far this year, with the BLS noting in its release that "severe winter weather occurred in much of the country during the February reference periods for the establishment and household surveys." As a result - skewed statistics or not - the state and long-term trajectory of the economy remain uncertain even as the Federal Reserve plows ahead with its plans for continued tapering of the stimulus program.

Inside the data
BLS data also showed that the number of long-term unemployed individuals increased by 203,000 in February and now totals 3.8 million - or 37 percent of the whole jobless population. The civilian labor force participation rate and the employment-to-population ratio each remained near their historic lows of 63 percent and 58.8 percent, respectively. Neither was much changed on an annual basis, with the labor force participation rate exhibiting the more significant dip at 0.5 percent from February 2013.

Over the past year, the rate of job growth has averaged 189,000 positions added each month. Accounting for the current pace of population growth and the number of new jobs seekers absorbed by the prospective workforce on a monthly basis, HousingWire reported that at this rate it will be December 2018 by the time the labor situation returns to something reflecting its pre-recession health.

During February, the largest gains in employment were seen from the professional and business services sector, which added 79,000 new positions. Temporary help services accounted for 24,000 new jobs, while accounting and bookkeeping services provided 16,000 new positions. Jobs for services to buildings and dwellings increased by 11,000, while in the construction sector employment in heavy and civil engineering accounted for 12,000 of the 15,000 new opportunities that were created.

The issue of the marginally employed
In terms of individual groups, the unemployment rates for adult men, adult women and teenagers for February were 6.4 percent, 5.9 percent and 21.4 percent, respectively. The jobless rates for whites (5.8 percent), blacks (12 percent), Hispanics (8.1 percent) and Asians (6 percent) were mostly unchanged from January, according to BLS data.

Involuntary part-time workers - or those employed part-time for economic reasons - remained at around 7.2 million people nationally. The bureau categorizes this segment of the population mostly based on the need to find part-time work as a result of pay cuts or reductions in hours or shifts offered. In some cases, these individuals are also defined by their inability to find full-time work. The data also revealed that through February, 2.3 million people were "marginally attached" to the labor force, a figure that represents a somewhat-promising year-over-year decline of 285,000 people. Many of these individuals were not actively seeking a job over the past 12 months and therefore not counted as unemployed - a distinction that explains some of the discrepancies between the unemployment rate and the number of positions added to the economy each month.

Only one sector registered a notable decline in employment for February, with the information industry workforce reduced by 16,000 positions. Most of that decline occurred in the staffing motion picture and sound recording operations, however, where employment situations are considered to be particularly volatile from month to month.