Jobs!

Today’s employment report looks good. It’s as simple as that. We don’t even need to spend time to pick apart its nuances. There aren’t many.

The economy added 236,000 jobs in February. That brought the unemployment rate down to 7.7% from January’s 7.9%. Both these numbers are good news. Well, sort of.

Some perspective: the unemployment rate is now down to a five year low. The last time we had such a level was in December 2008 just as things were beginning to tank. It has been a long slow crawl back, but clearly the economy is now well on its way to full recovery.

More importantly the new jobs were scattered across the economy. Most, if not all, sectors saw job growth. Business service businesses added 73,000 jobs and thus led the pack. Next was construction – housing is slowly coming alive – with 48,000; health care added 32,000; and the other largest sector increase was in retail with 24,000. Only the government shed jobs – 10,000 – as it continues to shrink.

Today’s news has to be seen in the context of yesterday’s report on new claims for unemployment assistance which also showed improvement. Claims were 340,000 last week which is just about a five year low. Both sides of the job market – hiring and firing – are getting back to reasonable health.

There isn’t much to say in the face of this data. The economy is doing decently, with not great, but fair growth . This is despite the headwinds created by government policy which is about to mess the good work up, and despite issues such as bad weather that notoriously muddy the statistical waters.

But. You knew there had to be one.

We have to acknowledge that even though things look better, they are not enough. It has taken way too long to get unemployment this low. Worse, nothing else in the data suggests anything other than modest growth this year. This implies that today’s report may be the best for a while.

So, as we contemplate the negative effects of government spending cuts, we can at least note that, were it not for the upcoming self-imposed slowdown, the economy would probably have been chugging along fairly well. Instead it will slow down later in the year as those cuts start to bite.

The good news is that the economy looks just about robust enough – barely – to withstand the stupidity of our politicians. For that we ought to be grateful. It could have been a lot worse.

Addendum:

For the more morose amongst you: yes, I know that 236,000 is not huge when compared with the heady days of the Clinton administration. But it’s better than most any month of the Bush era. Don’t forget that both those regimes were bubble affected and need to be viewed with great skepticism. And, yes, I know that the drop in the unemployment rate was helped a bit by the drop in the size of the workforce. That decline was small, however, so let’s not imagine it was the sole cause of the improvement.

I will give you one thing, however, any fanfares about today’s news ought to be short and subdued. As I pointed out above: the sequester and/or other cuts in spending will undo the good work soon enough.