February Employment: 175K New Jobs, Employment Rate Ticks Up To 6.7%

Here is the lead paragraph from the Employment Situation Summary released this morning by the Bureau of Labor Statistics:

Total nonfarm payroll employment increased by 175,000 in February, and the unemployment rate was little changed at 6.7 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in professional and business services and in wholesale trade but declined in information…. 

Severe winter weather occurred in much of the country during the February reference periods for the establishment and household surveys.

Today’s report of 175K new nonfarm jobs was better than the Investing.com forecast of 149K. And the unemployment rate of 6.7% was a tick above theInvesting.com expectation of no change at 6.6%.

The BLS report specifically references Question 8 in its separate Employment Situation Frequently Asked Questions for a description of how bad weather impacts the data.

The unemployment peak for the current cycle was 10.0% in October 2009. The chart here shows the pattern of unemployment, recessions and both the nominal and real (inflation-adjusted) price of the S&P Composite since 1948.

Unemployment is usually a lagging indicator that moves inversely with equity prices (top chart). Note the increasing peaks in unemployment in 1971, 1975 and 1982. The inverse pattern becomes clearer when viewed against real (inflation-adjusted) S&P Composite, with its successively lower bear market bottoms. The mirror relationship seems to be repeating itself with the most recent and previous bear markets.

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The second chart shows the unemployment rate for the civilian population unemployed 27 weeks and over. This rate has fallen significantly since its 4.4% all-time peak in April 2010, but for the past 11 months it has been range bound between 2.8% and 2.3%, with the latest at 2.5%.

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The next chart is an overlay of the unemployment rate and the employment-population ratio. This is the ratio of the number of employed people to the total civilian population age 16 and over.