Long way to go for U.S. despite strong February employment growth

The U.S. economy still has a long way to go to make up for millions of recession-fueled job losses despite strong employment growth in February, economists said Friday.

The labor market added 236,000 jobs in February, according to Friday's report from the U.S. Labor Bureau, marking three years of job growth since the recession's low point three years ago. The unemployment rate dropped to 7.7 percent last month from 7.9 percent of the previous month, signaling the lowest jobless rate since December 2008.

"The strong showing in February is welcome, but given the jobs deficit of 8.9 million jobs, even at February's growth rate we wouldn't get back to the pre-recession unemployment rate until 2017," said Heidi Shierholz, economist at the Economic Policy Institute.

"The pace of job growth since the employment trough in February 2010 has barely been strong enough to begin to restore the damage done by the Great Recession," she said.

The share of employment dropped from 63.3 percent in February 2007 to 58.5 percent in February 2010. As of February 2013, it was 58.6 percent, she said.

Shierholz added that the increase was not due to a larger share of the working-age population landing jobs, however, as labor force participation took a nosedive.

Indeed, the labor force participation rate, a measure of workers and those seeking full-time work, plunged to a 32-year low of 64 percent.

"All in all this was a strong report, but we need reports this strong and stronger for several years to get back to health in the labor market," she said.

Gary Burtless, a senior fellow in economic studies at the Washington-based think tank Brookings Institution, said half of the labor rate decline is traceable to the aging population, as a large number of baby boomers have reached retirement age and the percentage of working adults is shrinking.

The other half can be traced to the discouraged workers' effect, as the weakness of the job market discourages some adults from joining the workforce and causes others to give up their job search, he said.

U.S. jobs numbers rose as Washington continues to debate the impact of the sequesteration -- the spate of cuts in spending increases that kicked in March 1 -- with some experts questioning whether the jobs increase will last.

The White House noted Friday that the period measured in the jobs report came before the sequestration began, calling into question whether employment gains will stick.

President Barack Obama has warned in recent weeks that cuts could damage the economy, and economists predict a GDP growth drop of 0.5 percent this year, slowing an economic recovery that would otherwise look stronger in many sectors.

Others, however, blast the president for what they bill as exaggerating the impact, contending that the 85 billion U.S. dollars in cuts comprise just a sliver of the 3.5-trillion-dollar budget.

Burtless added that long-term unemployment -- a six-month or longer jobless stint -- remains extraordinarily high by historical standards.

Between 1967 and 2007, long-term jobless rates averaged 0.9 percent and never exceeded 2.6 percent. Since 2008, the long-term unemployment rate has averaged 3.1 percent and rose as high as 4.3 percent in 2010, Burtless noted.

As the job market has improved, the number of long-term unemployed has shrunk, although February's long-term jobless rate remained slightly above 3 percent.