Typically, the unemployment rate ticks up early in economic recoveries as discouraged workers return to the labor force, but according to the household survey, the labor force increased by only 60,000 in February.

February Employment Situation report from Bureau of Labor Statistics had headline numbers of a 192,000 increase in total nonfarm payroll employment and a reduction in the unemployment rate from 9 to 8.9 percent. That might seem like solid improvement over January, particularly given that the private sector added 222,000 to payrolls, but these numbers are still pretty weak compared to where we need to be.

First, the difference between the 222,000 jobs private payrolls added and the 192,000 increase in total nonfarm payrolls is the 30,000 jobs state and local governments cut. State and local governments have shed roughly 400,000 jobs from the peak in 2008 and with state budgets in the shape they are in this will only continue.

The private sector is not poised to absorb these workers. Instead, private sector job growth will be undermined as school years are shortened, teachers are sacked, and more generally the public sector pulls back on payrolls and the purchases of goods and services.

Second, the labor force has shrunk by conservatively 1.26 million since its peak in late 2008. If these workers had all returned to the labor force in February the unemployment rate would be 9.7 instead of 8.9 percent. So there are still 1.2 million people who were employed or willing to work two years ago who aren?EUR??,,????'?????<