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March 03, 2011

US Unemployment Drops to 8.9 Percent

by Mil Arcega

U.S. unemployment dipped below 9 percent last month, as private employers added the most jobs since April. The U.S. Labor Department released its monthly employment report Friday, showing the U.S. economy picked up a net total of 192,000 jobs in February. That brings the U.S. jobless rate to 8.9 percent - the lowest in nearly two years and another sign that the US recovery is picking up steam.

In the Midwestern state of Wisconsin - another sign of the improving economy. The Oshkosh Corporation is hiring 750 workers to service its military contracts. For the 2,500 applicants competing for those jobs, it's a welcome glimmer of hope.

One man in Wisconsin said, "Fourteen years in the paper industry and a little bit in between there, and now I've hopefully got a new start."

And the latest job numbers support his optimism. Private employers added 222,000 jobs last month, bringing the nation's unemployment rate to its lowest level since April 2009.

Wells Fargo chief economist John Silva said it shows that companies are more confident about a sustained U.S. recovery. "It was nice to see the unemployment rate down a little bit. It was good to see that most of the job growth was in fact in the private sector. I think those are all good signs telling us that we have sustained economic growth and a better labor market."

The fastest growth has been in the manufacturing and service sectors, which have benefited from higher consumer spending and an increase in U.S. exports abroad.

Still, the total number of unemployed remains high at 13.7 million, nearly double what it was before the recession. Factoring in those wishing to work more hours and those who have given up looking for work - the so-called underemployment rate is 15.9 percent.

Labor Secretary Hilda Solis said, "We need to be reminded that we've added jobs. One and a half million private sector jobs, and that, I think, it's right where we need to be, but we need to continue to not lose sight of where we need to go to increase opportunities for people to get employed in new jobs."

A larger threat to sustained job growth, though, is the rising price of oil - now above $100 a barrel. White House spokesman Jay Carney said,
"The president is extremely aware of the impact that a spike in oil prices can have on gasoline prices and therefore on the wallets and pocketbooks of average Americans."

Unemployment has dropped nearly one percent since November. Average paychecks have remained flat, however, which means higher gas prices could put a serious dent in consumer spending.