The U.S. economy gained more than 200,000 jobs last month, and the unemployment rate fell to 8.8 percent, the Labor Department said Friday. The news is a bit better than most economists had expected. But they say it will still take several years before unemployment falls back to a normal level.
This latest jobs report suggests that the economic recovery is continuing. The overall drop in unemployment was welcome news to President Obama.
"Nearly two years after one of the worst recessions in our history, certainly the worst one in our lifetimes," he said at a UPS facility in Landover, Md., "our economy is showing signs of real strength. Today we learned that we added 230,000 private sector jobs last month, and that's good news."
Randall Krozner, an economist at the University of Chicago and a former governor of the Federal Reserve Board, said, " I think this is good news. We're starting to see balanced job growth in manufacturing and in the services sector."
A Shift From Part Time To Full Time
And, he says, after hiring people just as temporary workers, more companies are now bringing them on as permanent employees.
"And that's a very good sign because it shows that businesses are more confident about the future," he says. "They're not just hiring workers temporarily, but they're hiring workers on a long-term basis."
You can see that happening firsthand at the Cybex factory in Medway, Mass. The company makes treadmills, bikes and other exercise equipment for health clubs.
"Cybex just took me on permanent full time a couple of weeks ago," says Shawn Cormier. He was a temp worker for a few months after losing his job as a senior manager in the construction business. "I got laid off, collected unemployment while I searched aggressively for a job for 20 months," he says.
Cormier eventually ran out of unemployment and had no health benefits. Meanwhile, his wife was having medical problems. So he is very happy to once again to have a job with health insurance.
"Took her to a cardiologist. As it turns out, she does have something going on. They're testing now. It could be a possible blockage of one of her arteries, so it's potentially serious for her," he says. "You know, your family worries about their health and I worry also."
A Pickup In Demand Drives Hiring
Across the factory floor, sparks are flying as a big robotic arm welds together the frame for a Cybex treadmill. This robot can weld four times as fast as a human welder. And the robot and the humans working around it have all been working longer hours lately.
Cybex President Art Hicks says business has been picking up. "For us we saw the bottom in mid-2010," he says. "The second half of 2010 improved. Fourth quarter we were up 15 percent and in this first quarter we're up over 10 percent over the prior year. So it's definitely picked up."
That's allowing the company to start hiring more people. Hicks says some of the growth is coming from overseas and even some developing countries. "International holds greater promise — double digit," he says. "So, for example, India came from nothing to our top five customers in the world.
"The 'made in America' does play well in a lot of venues," he adds. "They do value quality and that's where we play."
Economists say people are making more money in India and China, and U.S. products are getting more competitive there.
Good News, Bad News
Still, a lot of people around the country are still searching for work.
"Seven million jobs have to be created for us to get back to where we were before the recession started," says Nariman Behravesh, chief economist of IHS Global Insight. "So good news, bad news. Good news: we're making progress; bad news: it's probably not fast enough."
Behravesh estimates it could take up to three years or longer to get the unemployment rate back down to around 6 percent, where he'd like to see it.