Weekly US Economic Snapshot: How Are We Doing?

The economic picture got considerably messier this week, as positive data on job creation battled with gasoline-price-fueled inflation concerns in economists', policymakers' and consumers' minds. Joyous declarations that the economy is finally getting better have turned into more studious critiques of how the incipient recovery is actually affecting poor, working-class and middle-class people.

While employment data released on Friday in a Labor Dept. report showed that non-farm jobs are being created, "we're not seeing the underlying trends that are positive," Kim Fraser said, a Houston-based economist for BBVA Research.

For example, the number of involuntary part-time workers -- those who would take a full-time job if one were available to them -- is still high, Fraser notes. So is the number of people who have been out of a job for over six months, constituting 42.6 percent of the total unemployed portion of the labor force.

"There's a lot of underlying issues that need to be addressed that aren't being addressed," Fraser said.

Data underlying the employment statistics in the United States also show that, even though jobs are being created, they are not high-paying jobs. In fact, the meager gains in earnings that households have seen over the past few months have been more than wiped out by increases in the price of gasoline. And it remains to be seen how the job growth data will affect central bank decision-makers in the next few weeks, given the pressure from inflation that has caused central bankers in other parts of the world to halt further monetary loosening.

"The prevailing question among monetary policymakers and market participants will be whether the apparent momentum in the labor market translates into other key economic data," Joseph A. LaVorgna, chief U.S. economist at Deutsche Bank, wrote in a note to clients on Friday.

Here's a look at how economists described the situation this week:

Labor. The Friday employment report showed overwhelmingly positive numbers in terms of job creation, with non-farm payrolls going up 227,000 in February. The increase was the result of solid job creation in the private sector, combined with the fact that only 6,000 government workers were fired in the period. Net revisions to previous months also added 61,000 new jobs to the employment picture. However, the job creation did not move the unemployment rate downward, as the number of workers entering the labor force narrowly surpassed the number of jobs created for the month. Economists were somewhat concerned that the rate of household earnings growth, at 0.1 percent, was below the rate of inflation, given that many of the new job opportunities being created were in notoriously low-paying sectors, like leisure services.

"Do we have growth? Yes. Do we have the growth in jobs and income many expected? No. That continues to be a running theme for this recovery," John E. Silvia, chief economist at Wells Fargo Securities, wrote in a note to clients.

Industrial production. Production growth slowed somewhat in the month, something economists had expected following the exuberant increases reported during the final quarter of 2011. Wholesale inventories increased just 0.4 percent in February, less than the 0.6 percent growth economists had expected and the 1.0 percent rise experienced in the previous month. That figure shows wholesalers are being more cautious about increasing production in the face of waning sales. But they are still growing. The services sector, which is less cyclical than manufacturing, is doing swimmingly, with an index of activity in the economic area growing for the fourth consecutive month.

Housing. This notoriously weak area of the economy remains soft. The Mortgage Bankers Association weekly survey of mortgage applications has been declining when compared to the same period a year ago, since the week of Feb.15.

Inflation. There were no particular data releases pointing to an inflation rate increase in the past few weeks, but anecdotal evidence, the price of energy commodities and actions by various central banks around the world suggest price surges are becoming a concern. Retail gas prices averaged $3.758 per gallon nationally at week's end, according to the AAA's Daily Fuel Gauge report. Prices were much higher in populous states like Illinois and New York. In California, gas was an astonishing $4.35 per gallon.