Jobless Rate Holds Steady, Raising Hopes of Recovery

The economy lost fewer jobs than expected in February, the government reported Friday, bolstering hopes that a still-sputtering recovery was beginning to gain momentum.

The Labor Department said that the economy shed 36,000 jobs last month and that the unemployment rate remained steady at 9.7 percent.

While the losses were less than Bloomberg’s consensus estimate of a 68,000 decline, the report did not offer a clear snapshot of the economy’s underlying health. With businesses still skittish about hiring, and the end of stimulus programs in sight, economists are concerned that the labor market’s slow growth may hamper a recovery.

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

The brunt of the losses was in the construction sector, while temporary work agencies expanded as businesses began to tentatively rebuild their enterprises.

Estimates for the month had varied wildly as economists tried to account for the effect of winter storms in mid-February that shut down much of the East Coast. The Labor Department said Friday that while weather “may have affected payroll employment and hours,” the effect could not be quantified.

Nigel Gault, an economist for IHS Global Insight, said the report suggested a cascade of job losses brought on by the recession would finally begin to reverse, with job creation coming as soon as March.

“We are just about to turn the corner,” Mr. Gault said. “Businesses still need more confidence in the strength and durability of the recovery.”

The economy is expected to add as many as 100,000 jobs a month later this year. The results in the last few months have reflected the tentativeness of the recovery — 26,000 jobs were lost in January, 109,000 jobs were lost in December, 64,000 were added in November, and 224,000 were lost in October.

Doubts about the recovery have resurfaced in recent weeks in light of weak economic data. Consumer confidence has waned, and sales of homes have fallen rather sharply. Still, there are signs of a rebound: the manufacturing sector is improving, and businesses appear to be reinvesting in capital.

But without a vibrant jobs market, consumer spending will likely remain tepid, and businesses will continue to rein in costs.

In Adrian, Mich., executives at Brazeway, a refrigeration tubing manufacturer, are grappling with those uncertainties. The company has trimmed its workforce more than 30 percent in the last two years, and now has about 1200 employees.

Even as orders and production have helped energize the manufacturing sector, Brazeway has remained cautious about hiring, only bringing on temporary workers. Since its cutbacks, the company has added only three permanent positions.

“We have people beating down our doors for jobs,” said Stephanie H. Boyse, the president and chief executive. “We’re in this mindset of adding only the absolute must-have’s, and the nice-to have’s stay on the back burner.”

On Thursday, the House of Representatives passed a $15 billion plan to encourage hiring by offering tax breaks to businesses. But millions of Americans remain without a job, and many of them been out of the work force for more than a year.

Rebecca Miranda, 32, lost her job as a recruiter for hospitals nearly two years ago. She is paid $1,500 in unemployment benefits each month, but as a single mother of a 2-year-old girl, she said she is “lucky if I have $2 left over” at the end of the month.

“I’ve been out of work so long, I’m going to be the last kind of person they are going to hire,” Ms. Miranda said. “If this economy isn’t going to give me a job, then I’m going to get myself one.”

Her plan is to begin selling homemade pies and chocolates.