US job market continues to improve, gives Obama hope

The U.S. unemployment rate held steady in February at 8.3 percent with a better-than-expected job increase, bolstering reelection hopes for President Barack Obama. REASONS FOR OPTIMISM The private sector added 233,000 jobs and overall employment rose by 227,000 jobs in February, with more hiring across industries. About 1.2 million jobs were created during the past six months, the fastest pace since 2006, indicating a steady improvement in the labor market. About 476,000 extra workers, who had possibly been discouraged by the depressed market, started to seek employment again last month. The labor force participation rate, which measures the share of the working-age population working or looking for jobs, rose slightly to 63.9 percent from 63.7 in the previous month. Friday's job report followed other recent indicators about the labor market. The number of initial claims for jobless benefits stood at 362,000 in the week ending March 3. Though it is higher than the level of the previous week which hit a 4-year low, it still stayed below the threshold of 375,000 to suggest a sustained drop in the unemployment rate. The positive job data lifted the sentiment on Wall Street, with the three main stocks ending higher than the previous day. "Today's employment report provides further evidence that the economy is continuing to heal from the worst economic downturn since the Great Depression," Alan Krueger, chairman of the Council of Economic Advisers, commented on the figures Friday. He considered the trend in job market indicators over recent months as an encouraging sign. The improving job market is also good news for Obama, whose re-election chances hinge on the country's economic state. Economists believe that payroll gains could translate into growing household income, laying the groundwork for an increase in consumer spending, which is the main driver for economic growth. Obama regarded the figures as proof that the recovery is speeding up. He said the U.S. economy is "getting stronger" and the nation must keep its "economic engine churning" as he delivered his speech at a Rolls Royce plant in Virginia. MORE NEEDS TO BE DONE However, the recent pickup in employment failed to convince Ben Bernanke, chairman of the Federal Reserve, who said last week that even with gains, the labor market remained "far from normal." Bernanke argued that the unemployment rate remained elevated, that long-term unemployment was still near record levels, and that the number of people working part-time for economic reasons was very high. In February, the total number of unemployed Americans was virtually unchanged at 12.8 million, while the number of long-term unemployed was changed slightly at 5.4 million, accounting for 42.6 percent of the unemployed. The job market still faces a long road to full recovery, as about 5.6 million jobs that were lost during the recession have not been recovered. Indeed, despite the current labor market's improvement, Obama's reelection cannot be guaranteed. Heather Boushey, senior economist at the Center for American Progress, a Washington-based think tank, said the latest employment numbers pointed to continued economic recovery. However, she said the 8.3-percent unemployment rate is "still unacceptable" and called for action to maintain the momentum of the ongoing economic recovery. Top Republicans, who reluctantly acknowledged the gains in the labor market, complained about the continuing high unemployment rate. U.S. House Speaker John Boehner said the job report provided some "encouragement" for millions of families and small businesses who are struggling in this economy, but unemployment "remains far too high." "While the economy is slowly adding new jobs, job growth must be stronger in order for the millions of unemployed to get back to work," House Majority Leader Eric Cantor said Friday in a statement on the latest jobs report.