Press Releases

The Economy Shows Slow Improvement

Although the long anticipated turnaround in employment has yet to occur, some slight improvement on this front is providing hope that job gains may only be a month or two away. Nonfarm payroll employment fell 36,000 in February at a seasonally adjusted annual rate. Though greater than the loss of 26,000 jobs in January, given the extremely bad weather over much of the nation that month, the “true” job losses might not have been quite as large.

With the return of more normal weather this month, March employment numbers, due out in early April, will likely be the first positive employment report in more than two years and provide additional proof that the U.S. economy is in the early stages of a recovery.

The Federal Reserve seems to agree with this assessment. In its press release for the March 16 Federal Open Market Committee (FOMC) meeting, the Fed said that “the labor market is stabilizing.”

At the same time, the unemployment rate held steady at 9.7% in February, down from its peak of 10.1% in October 2009.

Other indicators also show progress. Industrial production — often one of the first indicators to turn positive — has increased for eight months in a row. Capacity utilization — a measure of how fully the available industrial capacity is being used — stood at 72.7% in February, up from its recent low of 68.3% last June. And consumers are spending more, with retail sales rising for the past two months and in four of the past five months. On a year-over-year basis, sales are up 4.1%.

We need to see improvements in retail and employment as an indication that consumers are ready to take on more significant purchases such as homes.