Economic Snapshot: Unemployment rate down to 4.9 percent

While the unemployment rate is essentially unchanged at 4.9 percent, it is now below 5 percent for the first time since 2008.

Employment situation

Total nonfarm payroll employment increased by 242,000 and the unemployment rate was essentially unchanged at 4.9 percent in February. The number of unemployed persons was unchanged at 7.8 million.

Over the year, the unemployment rate and the number of unemployed persons were down by 0.6 percentage points and 831,000, respectively.

The number of long-term unemployed was essentially unchanged at 2.2 million in February and has shown little movement since June. In February, these individuals accounted for 27.7 percent of the unemployed. The number of persons employed part time for economic reasons was unchanged in February at 6.0 million and has shown little movement since November.

There were 1.8 million persons marginally attached to the labor force in February, down by 365,000 from the previous year. Among the marginally attached, there were 599,000 discouraged workers in February, down by 133,000 from a year earlier.

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NFIB Small Business Optimism Index

The NFIB Small Business Optimism Index fell 1 point to 92.9 in February, now at a two-year low. None of the 10 index components posted a gain. Six posted small declines and four were unchanged.

Reported job creation reversed in February, with an average employment change per firm falling to a decline in employment of -0.12 workers per firm. Eleven percent reported increasing an average of 1.9 workers per firm, down 1 percent, while 13 percent reported reducing employment an average of 4.8 workers per firm, up 2 points.

Forty-nine percent reported hiring or trying to hire, down 3 points, but 42 percent reported few or no qualified applicants for the positions they were trying to fill. The percent of owners citing the difficulty of finding qualified workers as their Single Most Important Business Problem fell 3 points to 12 percent, still No. 3 on the list of problems behind taxes and regulations and red tape, and historically high.

Small Business Lending Index

The Thomson Reuters/PayNet Small Business Lending Index registered 118.2 in January, the lowest level since November 2014. U.S. small business borrowing fell 13 percent, which is a sign that economic growth could weaken in the coming months. According to Reuters, the PayNet index typically corresponds to U.S. gross domestic product growth one or two quarters ahead.

"This is a dramatic form, an extreme form of hunkering down," said Bill Phelan, president of PayNet, noting that January's level of borrowing is not even enough to replace worn-out equipment, let alone buy new machines.

The delinquency rate on loans more than 30 days past due is also showing "a little bit of erosion," Phelan said. The delinquency rate rose in January to 1.48 percent, the highest percentage since June, separate data from PayNet showed.

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