The Labor Department reported today that the economy shed a modest 36,000 jobs in February, slightly higher than the 26,000 lost in January. Meanwhile the unemployment rate remained unchanged at 9.7 percent.
The absence of strong employment gains shows that manufacturers remain guarded in their outlook. After rising by 20,000 jobs in January, manufacturing employment remained essentially unchanged last month, with an increase of just 1,000 jobs. Of the 21 manufacturing industries, more than half (13) reported modest gains, totaling 19,300 jobs. These increases were largely offset by declines in seven industries, led by motor vehicle employment. Given the underwhelming report earlier this week on January factory orders, a more robust upturn in manufacturing output and employment in the coming few months is not likely in the cards.
Within the service sector, widespread — though generally modest — employment declines continued in February. Upturns in education and health service employment ( which has largely been immune from the recession) and temporary services more than offset moderate declines in most other service industries, signaling that employers still have a good deal of uncertainty about the underlying strength of the recovery and are hesitant to expand their payrolls.