Jobless Rate Holds Steady, Raising Hopes of Recovery

The American economy lost fewer jobs than expected last month and the unemployment rate remained steady at 9.7 percent, the Labor Department reported Friday, bolstering hopes that a still-tenuous recovery may be starting to gain momentum.

The government’s monthly snapshot of the job market found that another 36,000 jobs disappeared in February — hardly cause for a celebration.

Yet compared to the monthly losses of more than 650,000 jobs a year ago, and against a backdrop of recent news that increased the possibility of a slide back into recession, most economists construed the report as a sign of improvement.

“It’s strikingly good,” said Dean Baker, a director of the Center for Economic and Policy Research in Washington, who has been notably skeptical of signs of recovery in recent months. “It’s much better than it had been looking.”

Some economists suggested that the report would look even better were it not for heavy snowstorms that blanketed major cities in February, keeping would-be job seekers at home. Most experts now expect losses in the job market will give way to gains during the spring, as still cautious American employers edge gingerly back toward hiring.

“We’re still losing jobs in the economy, but it’s down to a trickle,” said Stuart G. Hoffman, chief economist at PNC Financial Services Group in Pittsburgh. “We’re finally going to reach the turning point where we go from job losses to job gains.”

Alan Levenson, chief economist for T. Rowe Price, an investment firm, said that “If you recognize it as one frame in a movie, it is one in which we are moving toward resumption of job growth.”

Even as the report eased worries that the economy might teeter back toward a decline, it did little to dislodge the widespread notion that the recession has given way to a weak and uncertain expansion, one that is unlikely to provide the robust growth in hiring needed to cut significantly into the teeming ranks of the jobless.

Some 15 million Americans remained officially unemployed in February, and more than 4 in 10 had been mired there for longer than six months. The so-called underemployment rate — which counts people whose hours have been cut and those working part-time for lack of full-time positions, along with those out of work — reached 16.8 percent of the work force, up from 16.5 percent in January.

Labor specialists assume the economy needs to generate more than 100,000 fresh jobs a months just to keep pace with new entrants to the work force. Absent a surprisingly strong and sustained surge in hiring, joblessness and economic anxiety are likely to remain a stubborn affliction for years to come.

On Thursday, the House of Representatives passed a $15 billion plan to encourage hiring by offering tax breaks to businesses. The Obama administration on Friday urged Congress to pass more measures aimed at job creation, saying the report indicated “stabilization and gradual labor market healing.”

“The really important message in this report is that we’ve really hit the bottom, but we haven’t embarked on a robust recovery,” said Kathleen Stephansen, chief economist at Aladdin Capital Holdings.

Ms. Stephansen noted that most of the areas of job growth in the February report represent industries that were either growing already or have been bolstered by factors whose duration remains uncertain.

Manufacturing added a modest 1,000 jobs in February, on top of larger increases in January, but experts debate whether this is a trend with limited shelf life, as businesses that reduced inventories during the worst of the financial crisis rebuild their stocks. Health care and education — both stalwart sources of growth throughout the downturn — added 32,000 jobs.

“There is some stabilization in the labor market, but it’s tenuous,” Ms. Stephansen said.

The monthly jobs report is both the dominant indicator of national economic fortunes and a subject of debate among professional economists seeking to divine its inner message amid dueling interpretations. February’s report came draped in particular statistical uncertainty given the heavy snowstorms that assailed much of the East Coast and the Midwest during the month, slowing commercial activity.

Experts have noted that past snowy months — notably in 1996 — saw jobs reports that seemed weak at first and were subsequently revised up sharply, leading many to conclude that the February data will be similarly bumped up.

“The number they printed is artificially depressed by the snowstorm,” said Robert Barbera, chief economist at the research and trading firm ITG. “It continues the pattern that things are really improving.”