Wall Street had projected that payrolls would increase by 210,000 jobs. Obama on jobs: Keep engine going

President Barack Obama Friday touted another positive monthly jobs report — but it was the continued growth in the manufacturing sector he stressed in a visit to a Richmond, Va. factory.

“Our job now is to keep this economic engine churning,” Obama said in a speech at the Rolls-Royce jet engine factory. “We can’t go back to an economy that was weakened by outsourcing and bad debt and phony financial profits. We’ve got to have an economy that’s built to last – and that starts with manufacturing.”


The president unveiled plans to invest $1 billion in as many as 15 institutes for manufacturing innovation, which would bring together industry, federal agencies and colleges to bridge the gap between basic research and product development. While the program requires congressional funding, Obama said “we’re going to go ahead on our own” by founding a pilot institute.

“With that pilot in place, we’ll keep on pushing Congress to do the right thing because this is the kind of approach that can succeed,” the president said.

The economic momentum boosting Obama in the polls continued to roll forward Friday, as the economy added of 227,000 jobs in February and the county’s unemployment rate held steady at 8.3 percent.

Hiring in the manufacturing, health care and restaurant sectors contributed to the growth, while retailers and construction companies shed jobs, the Labor Department reported.

The payroll numbers slightly beat Wall Street forecasts of 210,000 jobs, confirming that the hiring jumps in recent months were not flukes. The January jobs numbers also were revised upward to 284,000 from 243,000, while the December results were increased to 223,000 from 203,000.

“Let’s call it a recovery: Payrolls growing at average rate of +245k per month over the past three months,” tweeted University of Pennsylvania economist Justin Wolfers minutes after the numbers were released. “That’s huge.”

Alan Krueger, chairman of the White House Council of Economic Advisers, said the results underscored the importance of Obama’s vision of an economy geared more toward factories.

“It is critical that we continue the economic policies that are helping us dig our way out of the deep hole that was caused by the recession that began at the end of 2007,” he wrote in a blog post. “To support a revival in manufacturing jobs and output, the President has proposed tax incentives for manufacturers, enhanced training for the workforce, and measures to create manufacturing hubs.”

Mark Zandi, chief economist at Moody’s Analytics, was quick to hail the February employment numbers as a “terrific report” coming on the heels of January and December, noting that a decline in weekly jobless claims was a major contribution to the gains.

“These good numbers that we’re getting are largely because of a reduction in the number of layoffs. We really have not yet seen a significant pick-up in hiring. The level of hiring is still very, very low,” he said on CNBC. “And to me, that’s a reason for some upside here. As soon as businesses start to engage in hiring in a more normal way, I really think we can start getting monthly job numbers of 300k, 350k, and even some really, really very good numbers.”

He added, “I don’t think we’re quite there yet and I think we’ve got some issues this spring given the run-up in gasoline prices and some seasonal issues, but I think we’re pretty close to that. … I think our standards are starting to rise.”

It’s an impressive rebound from fears that the economy was headed back into the recession, but employment was in a similar place last year and tuckered out with the start of the summer — a possibility that economists warn could be repeated because of rising gasoline prices.

Austan Goolsbee, former chairman of the White House Council of Economic Advisers, said the numbers were generally good news for the president, but he cautioned that the economy still had a ways to go.

“If the GDP slows down a little,” he told CNBC, “that’s likely to show up in the jobs numbers. And the other thing to remember is in a normal recovery, about a quarter or a third of it is coming from construction and housing. And we’ve still got 5 million vacant homes, so that’s probably still going to remain relatively weak.”

Republican lawmakers cheered the hiring but countered that new regulations, the threat of higher taxes and runaway deficits under Obama had kept the economy from running at full speed.

“Unemployment remains far too high,” House Speaker John Boehner (R-Ohio) said in a statement. “It is a testament to the hard work and entrepreneurship of the American people that they are creating any jobs in the midst of the onslaught of anti-business policies coming from this administration.”

GOP presidential candidate Mitt Romney hammered Obama over a 2009 forecast that the stimulus package would keep the unemployment rate from climbing above 8 percent, a prediction that backfired on the administration as the rate peaked at 10 percent.

Romney said in a Mississippi speech that Obama essentially predicted “if he can borrow $787 billion — almost $1 trillion — he can keep unemployment below 8 percent. It has not been below 8 percent since.”

Newt Gingrich took a swipe at Obama over climbing gasoline prices.

“The unfortunate reality for American families is that any marginal job growth is muted by soaring prices at the pump, Gingrich said in a statement. “Gas cost $1.89 a gallon the week President Obama was inaugurated just 3 years ago. As gas now creeps above $4 a gallon, the current administration cannot hide behind a stagnant unemployment rate while touting algae as the solution to our energy woes.”

Ron Paul, though, took issue not just with the president and his Republican opponents, but the calculation method.

“Today’s announcements that the official unemployment rate — which understates that true amount of unemployment — increased in February while the federal deficit reached historic levels provides further proof of the failure of the Keynesian spend-borrow-tax-and inflate polices embraced by the beltway leadership of both parties,” Paul said.

House Majority Leader Eric Cantor (R-Va.) used the numbers to push the JOBS Act passed Thursday by the House, a package of measures to help companies raise capital that the president and many Senate Democrats also support.

“Job growth must be stronger in order for the millions of unemployed to get back to work,” Cantor said. “We know that jobs aren’t created by Washington. Job growth comes from small-business owners and entrepreneurs who take risks and start new businesses. That’s why we’re doing everything we can to help small businesses grow and start hiring again.”

Stocks inched up in morning trading, with the Dow Jones Industrial Average increasing by 23 points, or 0.18 percent.

Unlike past months when the unemployment rate declined, in part, because Americans were leaving the workforce and no longer being factored into figures, the size of the labor pool increased by 476,000 in February.

Factory jobs increased by 31,000 last month, while health care and social services added 61,000 jobs, restaurant hiring grew by 41,000, and 45,000 temp workers were added to payrolls.

The gains outshone slight declines for retail (down by 7,400 jobs), construction (a 13,000-jobs decline) and the continued but slowing loss of government employees.

“It’s not all roses and sunshine,” said Scott Anderson, a senior economist for the bank Wells Fargo. “It would seem like consumers are still holding back. You’re not seeing a virtuous cycle for consumption. Doesn’t mean it won’t show up down the road, but consumers are still scrimping pennies and are in a de-leveraging mode.”

— MJ Lee contributed to this report.

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