8.3% Unemployment Not Likely to Improve Soon

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK ( TheStreet) -- The economy added 227,000 jobs in February, down from 284,000 in January and unemployment rate remained 8.3%. Going forward unemployment is not likely to fall much further and may rise again.

Fourth-quarter growth was exceptionally strong as the global economy recovered from first-half disruptions such as the earthquake in Japan, but going forward economists expect growth to slow to about 2%. Higher gas prices have halted the growth in consumer spending since November, and continued outsourcing from China and elsewhere in Asia is limiting jobs gains from resurgent manufacturing.

Job growth in the range of 140,000 a month should be expected in the second quarter, to accommodate labor force growth. But it won't do much to lower the unemployment rate. That is hardly a pace that will restore economic health, or validate President Obama's heavy intervention in the economy and industrial policies in the upcoming presidential campaign.

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The unemployment rate would be higher but for the fact many adults have simply quit looking for work and don't count in the jobless tally. Also, many displaced workers have established home-based businesses that really don't provide full-time employment but still take workers off the unemployment rolls.

Generally, gains were broad based, with significant increases notched in wholesale trade, transportation and warehousing, financial services, business services, education and health services, and leisure and hospitality services. However, retail sales help was trimmed, indicating consumer spending -- other than for autos and higher priced gas -- continues to stagnate.

Manufacturing added 31,000 jobs, while construction lost 13,000. The latter raises questions about whether, as economists expect, the building sector will add much to first-quarter growth.

Manufacturing

Gains in manufacturing production have not been accompanied by stronger improvements in employment largely because so much of the growth is focused in high-value activity. Assembly work, outside the auto patch, remains handicapped by the exchange-rate situation with the Chinese yuan. Even in autos, firms greatly assisted by the federal government are outsourcing to China to take advantage of its undervalued currency.

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