by Calculated Risk on 3/09/2007 08:28:00 AM

The BLS reports: U.S. nonfarm payrolls rose by 97,000 in February, after a revised 146,000 gain in January. The unemployment rate declined slightly to 4.5% in February.

Click on graph for larger image.

Here is the cumulative nonfarm job growth for Bush's 2nd term. The gray area represents the expected job growth (from 6 million to 10 million jobs over the four year term). Job growth has been solid for the last two years and is near the top of the expected range.

The following two graphs are the areas I've been watching closely: residential construction and retail employment.


Residential construction employment decreased by 23,500 jobs in February and is down 135.3 thousand, or about 4%, from the peak in February 2006. This is probably just the beginning of the loss of hundreds of thousands of residential construction jobs over the next year or so.

Note the scale doesn't start from zero: this is to better show the change in employment.

Nonresidential construction employment fell 38.5K in February. After increasing significantly in 2006 (up 4.6% in one year), nonresidential construction employment has been flat over the last four months. This might indicate the expected slowdown in nonresidential construction has started.


Retail employment gained 7,000 jobs in January. YoY retail employment is unchanged.

Overall this is a solid report. With the revisions to January and December, the economy has added 156K jobs net jobs per month for the last three months. The expected job losses in residential construction employment has just started, but the spillover to retail isn't significant yet. I expect the rate of residential construction job losses to increase over the next few months.