U.S. jobs begin reappearing

Associated Press

WASHINGTON — U.S. companies added jobs for the first time in seven months in February, helping push down the national unemployment rate to 5.5 percent in the strongest signal yet that the recession is over.

"It’s over. This is it," said Mark Zandi, chief economist for Economy.com, a consulting company. "This is the final nail in the recession’s coffin."

But economists also cautioned that the pain hasn’t ended for people looking for work, especially in the Northwest, which is lagging the rest of the country in recovery.

The Labor Department reported Friday that businesses added 66,000 jobs in February, breaking a string of losses that had averaged 146,000 a month since the recession started in March 2001. It was the largest employment increase since February 2001.

Warm weather, a slow holiday hiring season and reopening automobile factories all contributed to the February increase, which probably won’t be sustained.

"The 66,000 job increase overstates the case for the economy’s recovery, but it clearly makes the case that the economy is recovering," Zandi said.

The report sent stock prices higher. The Dow Jones industrial average closed up 47 points and the Nasdaq up 48.

Economists say January will probably be seen as the month in which the recession ended because of February’s job gains. The National Bureau of Economic Research, the traditionally recognized arbiter of when recessions begin and end in the United States, declared March as the starting date because employment peaked then, and has steadily dropped until now.

February’s jobless rate dropped by 0.1 percentage point to 5.5 percent, the lowest level since October.

President Bush welcomed the decline, but said that Americans out of work or on the brink of being laid off still need help.

"I’m not going to let the numbers lull me to sleep," Bush told workers at an electronics company in Florida.

Economists cautioned that clusters of help-wanted signs won’t be popping up just yet.

Companies are being cautious about hiring back workers and many businesses are still struggling. Kmart Corp. said Friday it is closing 284 stores across the country, including the one in Edmonds, and eliminating 22,000 jobs.

"The unemployment situation won’t truly improve until businesses increase hiring a lot more than they did in February," said Bill Cheney, chief economist with John Hancock Financial Services. "It takes roughly 150,000 new jobs per month just to keep the unemployment rate steady."

As it did during the last recession that ended in 1991, the nation’s unemployment rate still could rise in coming months as businesses regain financial strength. Some economists think the rate will climb to more than 6 percent before a prolonged drop-off occurs.

"There are still very few new jobs and minimal wage gains," Cheney said. "It will be a few more months before things feel a whole lot better for all those people who lost their jobs over the past year, or who still fear losing them."