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U.S. unemployment sinks to 8.9% as jobs are created

The U.S. economy finally seems to be reaching 'escape velocity,' one economist says. The nation gained 192,000 jobs in February, and unemployment fell below 9% for the first time in nearly two years.

March 05, 2011|By Jim Puzzanghera, Los Angeles Times

Still, February's job growth was the largest monthly increase since May, when the effects of the Obama administration's massive stimulus package were at their peak and the government was hiring thousands of temporary census workers.

Improved job growth is good news for President Obama, who said Friday that the nation needed to "keep building on that momentum." And the Obama administration used the news to warn against deep spending cuts being pushed by congressional Republicans.

Noting that there was still more economic work to be done, top White House economic advisor Austan Goolsbee said the administration would seek to "find ways to reduce spending, but not at the expense of derailing progress in the job market."

Ben S. Bernanke, chairman of the Federal Reserve, told lawmakers this week that there was "increased evidence that a self-sustaining recovery in consumer and business spending may be taking hold."

Initial claims for unemployment insurance fell last week to 368,000, the lowest level in nearly three years, the Labor Department reported. Large retailers reported sales were up 4.2% in February compared with the same month last year.

The Fed projects the economy will grow 3.5% to 4% this year.

Unrest in the Middle East looms as a potential problem for the recovery. A sustained rise in prices for oil and other commodities would threaten the recovery, Bernanke said.

But, Bernanke added, he did not expect the rise in oil prices caused by the Middle East turmoil to last.

jim.puzzanghera@latimes.com

Times staff writer Walter Hamilton contributed to this report.

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