CNNMoney.com Winter weather kept job seekers home and offices closed in January, getting the year off to a disappointing start, while the unemployment rate took a surprising tumble. The economy added just 36,000 jobs in January, falling far short of expectations. Meanwhile, the unemployment rate unexpectedly sunk to 9%, down from 9.4% the month before. Economists surveyed by CNNMoney were expecting the economy to add 149,000 jobs during the month, and the unemployment rate to rise to 9.5%. After the report was released, economists weren't quite sure what to make of the numbers, and used a mix of colorful adjectives like &quot;lousy,&quot; &quot;mysterious,&quot; and &quot;confounding.“ But one thing was clear -- weather played a large role in January. &quot;It's a disappointing employment report, with a touch of skepticism because of the weather's impact on the overall number,&quot; said John Silvia, chief economist with Wells Fargo. Major storms across large swaths of the country had a huge impact on businesses. According to the Labor Department's household survey, which calculates the unemployment rate, severe winter weather kept 886,000 people from going to work during the week of January 9. All those snow days kept a lot of companies from hiring, said economist John Canally with LPL Financial. It's possible that nasty weather could have reduced the overall payroll number by about 100,000, he said. The Labor Department also announced that job growth last year was weaker than originally stated. After 2010 revisions, there were about 900,000 jobs created during the year -- 215,000 fewer than previously reported. The labor market typically needs at least 300,000 job gains each month to make a difference in the unemployment rate, economists say, and at least 150,000 to keep pace with population growth. Headed in the right direction? While the sluggish growth to payrolls was disappointing, the drop in unemployment was interpreted in different ways. Some economists thought it was a result of people dropping out of the labor force, though others pointed to a once-a-year population adjustment based on census data that skewed the numbers. Almost all of the drop was due to unemployed people finding jobs again, said Zach Pandl, an economist with Nomura Securities. &quot;This part of the report deserves a positive interpretation,&quot; he said. Overall, the unemployment rate has had its largest two-month decline since 1958, he said. The two parts of the report sometimes differ, because they're derived from separate surveys. While the payroll number stems from a survey of employers, the unemployment rate comes from a different survey of American households. Canally said he expects the job market to show a spike in payrolls in February, and then resume a gradually improving trend. Any improvements though, are still likely to be at a very slow pace. &quot;People should not be too fearful of losing a job they have,&quot; Canally said. &quot;But if they don't already have a job, it's still tough. Companies are still reluctant to hire.&quot;
USA Today Employers added only 36,000 jobs in January, far fewer than expected, as manufacturing posted its strongest gains since the late 1990s, but construction and transportation businesses shed workers. Economists largely attributed the disappointing showing to severe weather. The nation's unemployment rate, which is calculated from a different survey less affected by weather, fell to a 21-month low 9% from 9.4% in December, the Bureau of Labor Statistics reported. The jobless rate has now dropped sharply two straight months and is down from 9.8% in November. But economists, such as RDQ Economics, said the severe weather likely kept Americans from looking for work, artificially reducing the labor force and pushing down the jobless rate. &quot;We look for the unemployment rate to rise back toward 9.5% and payrolls to jump significantly in February,&quot; RDQ said in a research note. Economists also largely downplayed January's meager payroll increase because 886,000 Americans said they couldn't' get to work last month because of bad weather, vs. a January average of 417,000. &quot;Clearly the rise in payrolls was held down by weather,&quot; says Jim O'Sullivan, chief economist of MF Global. That could result in a big jump in payroll employment next month. Economists had estimated that 146,000 jobs would be added in January. Perhaps more disheartening in Friday's report was that annual government revisions to employment data showed the nation gained only 909,000 jobs in 2010, vs. the 1.1 million previously estimated. Yet the recent trend has been positive. Employment figures for November and December were revised up by 40,000. Economic reports have shown strong job gains in both the manufacturing and service sectors in recent months. &quot;It looks like the trend is accelerating significantly,&quot; O'Sullivan says. Joel Naroff of Naroff Economic Advisors, says,&quot; The labor market is getting better, but not quite at the pace we'd like to see.“ After adding an average 75,000 jobs a month in 2010, after the recent revisions, O'Sullivan and other economists expects monthly job gains to pick up significantly to about 200,000 by mid-year. An encouraging sign: The number of people working part-time even though they wanted full-time work fell to 8.4 million from 8.9 million. That helped lower the underemployment rate — which also includes the unemployed and discouraged workers who've stopped looking — to 16.1% from 16.7%. And the ranks of those out of work at least six months fell to 6.2 million from 6.4 million. The number of temporary workers, however, fell 11,400 after adding an average 25,000 jobs a month the past year. And the average hours worked dipped to 34.2 hours from 34.3 hours a week. Increases in temporary workers and the work week typically augur growth in permanent staffing. But O'Sullivan said both categories were likely dampened by snowstorms. The manufacturing industry gained 49,000 jobs, most since 1998, largely because of surging automobile sales. Retailers added 27,500 jobs and professional and business services add 31,000. But the beleaguered construction industry lost 32,000 jobs, transportation and warehousing shed 38,000 and financial firms cut 10,000. Budget-strapped state and local governments chopped 12,000 workers while the federal government cut 14,000.
Wall Street Journal Job Report Muddies Outlook --- Payrolls Advance at Snail's Pace in Stormy Winter Even as Unemployment Rate Falls Sharply to 9% Meager January job growth and uncertainty about winter weather's effect on the numbers stirred concerns about the economic recovery, even as the unemployment rate fell to its lowest level in nearly two years. The government's broadest snapshot of the job market, released Friday, showed payrolls ticked up only 36,000 in January, far less than the 200,000 needed to sustain growth. However, the unemployment rate fell to 9%, from 9.4%, creating a contradictory picture. To be sure, the drop in the unemployment rate suggests that there is underlying strength in the job market -- despite the tepid pace of job creation. Reinforcing this view is the fact that other indicators have pointed to an economy slowly gathering momentum. Many investors shrugged off the report, concluding it was too difficult to draw conclusions from the numbers. The Dow Jones Industrial Average rose 29.89, to close at 12092.15. Treasury prices lost ground, indicating that some saw the unemployment report as a signal of a strengthening recovery. &quot;There was a very powerful, negative influence from bad weather,&quot; said Morgan Stanley economist David Greenlaw. He estimates that without the heavy snows that came early last month, there would have been 150,000 additional jobs. Duluth, Ga.-based temporary-staffing firm Hire Dynamics saw its business dwindle in the week following the Jan. 9 snowstorm that socked in much of the Southeast. &quot;It basically took Atlanta down for a week,&quot; said Chief Executive Dan Campbell. &quot;Most businesses were down at least two business days, and a large percentage of companies were down Monday through Friday.&quot; But a week after the storm &quot;business bounced back,&quot; he said. &quot;If anything, it bounced back further.“ But that bounce wasn't captured in the employment report. To tally its jobs figures, the Labor Department asks companies how many workers they had on their payroll during the pay period that includes the 12th of the month. If they didn't work during the pay period, like many of the people who work for Hire Dynamics, they don't count. All told, the Labor Department said that employment by temporary-staffing firms like Mr. Campbell's fell by 11,000, after adding an average of 25,000 a month in 2010. The snow again may have been a factor in the loss of 32,000 jobs in the construction sector and a loss of 38,000 jobs in transportation and warehousing. Private employers as a whole added 50,000 workers, while governments shed 11,000. The divergence between job creation and the unemployment rate can be traced to how the two benchmarks are calculated. The unemployment rate is based on a survey of households, rather than employers. In it, people who missed work because of weather are counted as employed regardless of whether they were paid for the time off. Usually, economists view the payroll figures as a more accurate measure than the unemployment rate, because the government surveys far more companies than it does households. When the job count gets roiled by storms like it did last month, however, the unemployment rate can be the better guide, say economists. Another complicating factor this month is that the Labor Department uses updated Census Bureau data to recalculate its population figures every January, and this year those revisions were unusually large. That makes it unclear how much of the shift lower in the unemployment rate occurred last month, and how much happened earlier last year. Also, while part of the drop in the unemployment rate was the result of more people finding work, another portion was due to people exiting the work force. The share of the population over 16 years old either working or looking for work fell to 64.2% in January, the lowest level since 1984, when far fewer women were in the work force. One bright spot is manufacturing employment, which continued to rise in January, with factories adding 49,000 workers -- the biggest monthly increase since 1998. Cookware manufacturer Northland Aluminum Products Inc., with about 350 workers, has increased its head count by 10% to 15% from a year ago. Demand has picked up, and after running into problems with excess inventory during the downturn, more retailers are trying to shorten their supply chains by buying American-made goods, according to CEO David Dalquist. One of the company's biggest problems now is finding qualified workers, the result of decades of declining factory employment. &quot;It's harder to find people who really understand manufacturing,&quot; Mr. Dalquist said. &quot;There's a lost generation of manufacturing technicians.“ Friday's jobs report included annual revisions to the payroll data, based on a more complete count of unemployment insurance records, that showed the economy lost even more jobs during the downturn than earlier reported. The revised data show that as of last March, the economy had lost 8.74 million jobs since the recession started in December 2007, compared to 8.31 million shown before the revision. Since March, the economy has added 827,000 jobs. Many people no longer are participating in the labor force, at least for now. Among them is Michelle Chesney-Offut of Sandwich, Ill. Ms. Chesney-Offut, 53 years old, lost her job as a help-desk supervisor in December 2008. After trying and failing to find a job over the next year, &quot;I just decided that I needed to go back to school,&quot; she said. She's been going to a community college for the past year. In May, she's aiming to finish an associate's degree in teaching and re-enter the job market.
As of December 2010 report
New York Times Jobs Report Offers a Mixed Bag, but Little Comfort The United States labor market is still having trouble achieving liftoff. Payrolls expanded by 36,000 jobs in January, a sharp decline from the gains of recent months and well below the level economists had forecast. The reluctance of employers to add jobs at a time of robust corporate profits, strengthening consumer spending and other economic improvement renewed concerns that this near-jobless recovery could continue for an extended period. The picture painted by the Labor Department ’s monthly snapshot of the job market was confounded by a more encouraging drop in the unemployment rate to 9 percent, from 9.4 percent a month earlier, for its lowest rate since April 2009. The unemployment rate is gleaned from a survey of households, rather than companies, and can be volatile. The snowstorms in January probably had some effect on the anemic job growth, given that the transportation and warehousing sector and the construction sector both shed jobs. Government layoffs, particularly at the state and local level, also reduced the overall number. A mosaic of other indicators this week suggested that the economic recovery was gaining momentum. A closely watched survey of manufacturers rose to its highest level since May 2004, and spending by consumers has outpaced expectations. On average, fewer people are filing for unemployment insurance. As a result, some economists said they would largely disregard January ’s weak payroll data. Others, however, cautioned that underlying job growth was still not robust. “ You can blame weather for the number being as low as it is,” said Steve Blitz, a senior economist for ITG Investment Research. “But even if you abstracted out the weather, you’re still not getting the dynamic job growth that is going to cut the unemployment rate significantly.” The private sector added 50,000 jobs, while government shed 14,000 jobs. Analysts had forecast an overall increase of about 145,000, roughly the number needed to absorb people joining the labor pool in good times. A broader measure of unemployment — which includes those whose hours have been cut, those who are working part time because they could not find full-time jobs, and those so discouraged that they have given up on the search — was 16.1 percent, down from 16.7 percent in December. That left 13.9 million people still out of work. For the unemployed, the situation is growing increasingly frustrating. Andrew Stettner, deputy director of the National Employment Law Project, said that given growth in corporate profits, “this is when we need to see jobs growing hand over fist.” A few sectors are indeed picking up. Health care and retail businesses added jobs, and manufacturing, a highlight of the recovery so far, added 49,000 jobs last month. While average weekly earnings for private sector workers barely budged, economists noted that average weekly earnings for manufacturing workers increased to $959.45 from $948.19, and an index of average weekly hours was also up. “ Those firms are working the people they have harder,” said Heather Boushey, senior economist at the liberal Center for American Progress. “And they will have to bring in new employees.” Cliff Waldman, economist at the Manufacturers Alliance/MAPI, said companies could be adding more jobs but were having some trouble filling slots that required workers with more skills. “ The modern manufacturing sector requires a different kind of worker than the manufacturing sector of 20 years ago,” Mr. Waldman said. “They have to be more literate, better at math and able to work in teams.” That does not bode well for those who have fewer skills and less education. The disproportionate burden that the grim labor market has imposed on the less skilled remained pronounced in January ’s numbers. The unemployment rate among people with less than a high school diploma was 14.2 percent, while the rate among those with a bachelor’s degree or higher was 4.2 percent. Recruiters and staffing companies underscored the fact that employers that were hiring were looking to fill slots that generally required candidates with college degrees. Evan Davis, chief operating officer of MRINetwork, which has 700 franchised recruiting offices throughout the United States, said the company had seen a strong increase in postings for information technology, engineering and health care jobs. In fact, Mr. Davis said, some employers were having a difficult time hiring for such openings. “ It’s actually hard to meet the demand that’s out there,” he said. “It’s really hard to find top talent.” Michael Bove, who recently secured a job in San Antonio helping sports teams work with ticketing software a year after he was laid off as a manager with a soccer team in Houston, said he could not imagine what it would be like to search for a job if he did not have his college degree. “ You hear stories of the people who are in their mid-40s or early 50s that have been working 20 or 25 years as bank branch managers or I.T. people and have all this experience but now they’re out there competing for entry-level positions that in the past might go to someone who doesn’t have a college degree,” Mr. Bove, 30, said. “Now companies can pick and choose who they want.” The number of people who had been out of work for six months or more eased to 6.2 million from 6.4 million. Austan Goolsbee , the chairman of the president ’s Council of Economic Advisers , disputed the suggestion that a significant portion of the long-term unemployed won’t be able to find work. “ The durations are essentially what you would expect when the overall unemployment rate is high,” Mr. Goolsbee said. “It’s still a serious problem, but the way we must address that is getting the growth rate up higher and encouraging firms to hire back workers.” The Labor Department ’s survey of household members, which tends to better account for the self-employed and those in newly formed firms than the payroll survey, showed a rosier view of the job market. The number of employed people rose by 589,000 last month, when the effects of adjustments to the total work force population numbers were stripped out. The government does not include those population adjustments in retroactive numbers, however, making comparisons with the unemployment rates through the months of last year more difficult. Other revisions to the data on the payroll side suggested that job growth in 2010 was slightly lower than originally reported. The report included upward revisions to November and December ’ s numbers , lifting job creation in November to 93,000 from 71,000, and in December to 121,000 from 103,000. Elsewhere, temporary help, which had been strong throughout 2010, actually declined by 11,400 jobs, and construction lagged, shedding 32,000 jobs. Economists noted that job growth would not truly hit the levels needed to seriously dent the unemployment rate until employers outside of a handful of industries started hiring in earnest. A crucial factor holding back job growth is that construction, which was among the hardest hit during the recession , has not yet revived. “ It’s very brutal in our industry,” said Brantley Barrow, chairman of Hardin Construction, a builder of office buildings, malls, hospitals and hotels based in Atlanta. “Even though the general economy is getting better, it’s going to be another year or two before things start to improve in our industry.” Victor Fernicola, a construction worker from Queens, N.Y., said he had been out of work since last February. He has high hopes that his union, Laborers Local 79, will soon send him job opportunities. “ It’s actually been moving,” he said of the construction labor market. “At one time it was pretty much at a standstill.” Many workers are waiting for the pace to pick up. The Federal Reserve chairman, Ben S. Bernanke , said on Thursday that “until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established.”
NY Times.com: Horizontal axis shows months. Vertical axis shows the ratio of that month ’s nonfarm payrolls to the nonfarm payrolls at the start of recession. Note: Because employment is a lagging indicator, the dates for these employment trends are not exactly synchronized with National Bureau of Economic Research’s official business cycle dates. The United States added 36,000 jobs on net in January, the Labor Department said today. The growth was again disappointingly slow, but many economists are unsure how to interpret the latest number because January snowstorms most likely played a big role in depressing employment. The industries that were probably most affected by the snowstorms were construction, which lost 32,000 jobs on net, and transportation and warehousing, which lost 38,000 jobs. The big winner last month was manufacturing, which added 49,000 jobs. Still, while any growth is a positive sign for the nation ’s beleaguered manufacturing workers, the manufacturing industry has two million fewer jobs today than it had when the Great Recession started in December 2007. Indeed, just about every industry has a long way to go before it returns to its pre-recession levels, if it ever does. The chart above shows economy-wide job changes in this recession compared with recent ones, with the black line representing the current downturn. Since the downturn began in December 2007, the economy has shed, on net, about 5.6 percent of its nonfarm payroll jobs. And that doesn ’t even account for the fact that the working-age population has continued to grow, meaning that if the economy were healthy we should have more jobs today than we had before the recession. The unemployment rate (measured by a different government survey, and based on how many people are without jobs but are actively looking for work) fell to 9 percent in January, from 9.4 percent in December. That means joblessness is at its lowest rate since April 2009. Part of the reason for the drop, though, was that some people gave up looking for jobs and so were no longer officially counted as “unemployed.”
NY Times Economix blog Summing Up the Jobs Report Today’s report gives a messy picture, but when you look beyond the messiness — bad weather, questions about survey methodology — I think the picture is much clearer. The job market has not improved much if at all over the past six months. There’s some chance it may be just starting to improve, yet it’s hard to be confident about that. Let’s start by going back to late 2009 and early 2010. After two years of recession, the job market finally began recovering. Employers were adding jobs. In the spring of 2010, though, the situation changed. The federal government started laying off its temporary Census workers. State and local government accelerated their own job cuts as the stimulus money began to slow. Private employers became spooked, too — perhaps because of the European debt crisis, perhaps because they remained unsure how quickly indebted households would begin spending again. In all likelihood, there was a complicated mix of reasons. Whatever the reasons, the recovery, at least in the job market, has essentially stalled over the past nine months. Both Labor Department surveys of employment — the one of households and the one of businesses — show little change in employment since May 2010. The population has continued to grow over that time, so little change in employment means that the job market has deteriorated. There are some reasons to think the situation is starting to improve again. Businesses are profitable, stock prices are rising and consumer spending has picked up. As my colleague Floyd Norris notes, a lot of other economic indicators — including some that track the job market in other ways, like initial jobless claims — look better than the monthly employment reports have. The most hopeful story holds that the job market did indeed pick up in December and would have continued doing so in January were it not for all the winter storms. Joshua Shapiro, an economist at the research firm MFR in New York, suggests that bad weather cost the economy more than 100,000 jobs last month. Those jobs will come back next month, and Mr. Shapiro — who has been notably sober-minded about the strength of the recovery — expects a job gain of more than 300,000 in next month’s report, up from just 36,000 this month. Even if you believe this story, though, the chances that we’re in for many more months of disappointing job growth seem uncomfortably high. And no matter what, the job market remains a long, long way — years away — from being healthy.
USA Today Economic index forecasts stronger growth The January update of the USA TODAY/IHS Global Insight Economic Outlook Index shows real GDP growth, at a six-month annualized growth rate, gaining momentum this year. The index forecasts a growth rate of 3.7% in March and April, up from 2.1% in September. Improved consumer and business confidence and the new tax legislation are expected to help fuel growth. But continued high unemployment, a still-weak housing sector and tight credit conditions will keep growth below 4% this year. The index predicts future real GDP growth (gross domestic product, adjusted for inflation) based on 11 leading economic and financial indicators. Five of the 11 indicators were positive in January, one less than in December. But the positive indicators offset the drag of the negative indicators. Positive indicators include hours worked, building permits, real capital goods orders, stock prices and the yield curve, all of which increased. Negative indicators include declines in ISM export orders and light-vehicle sales. Also negative were increases in seasonally adjusted crude oil prices, the AAA corporate bond spread and the real federal funds rate. This model assumes it can take 12 to 15 months for changes in the real federal funds rate to affect economic activity, so it uses the May 2010 — July 2010 rolling average to forecast real GDP in June 2011. The real money supply was neutral. About the USA TODAY/IHS Global Insight Economic Outlook Index USA TODAY and IHS Global Insight, a top-rated economic analysis and consulting firm, created this index to help readers track the economic recovery. The index predicts future gross domestic product (GDP) growth. Real GDP is the value of goods and services produced in the U.S., adjusted for inflation. It is a key measure of economic activity and an important factor in determining whether the economy is in a recession. To forecast real GDP growth, IHS Global Insight designed a model that produces a weighted composite of 11 leading indicators. The list includes a mix of economic and financial &quot;forward-looking&quot; indicators that have a strong correlation with future economic activity. As a group they accurately forecast economic growth and are sensitive to signs of stress in the economy. For each indicator, the model compares a moving average of the latest three months to a moving average over the past year. This enhances their predictive power in forecasting real GDP growth. The interactive graphic This interactive graphic charts the forecast values for real GDP growth. For historical context, we've included actual values back to 2002. Values for each of the 11 leading indicators are also charted. Most of the values reflect two- or three-month moving averages to smooth monthly volatility. All values are actual (that is, not forecasts) except for the most recent figures for light-vehicle sales and the corporate bond spread.
Economic Data Feb 2011
Reflective of the January 2011 National Jobs Report from the Bureau of Labor Statistics Economic data As of February 2011
Private and temporary sector growth continues JOBS GAINED IN JANUARY UNEMPLOYMENT RATE WORST UNEMPLOYMENT RATE SINCE 36,000 9.0% 1983 *Current recession excluded
Source: Labor Department Unemployment rate decreases to 9.0%
Source: CNNMoney.com Change in non-farm payrolls for January 2011
Source: WallStreetJournal.com Payroll vs. household data
Leisure & Hospitality Construction Manufacturing Retail Legal Accounting Architecture/Engineering Finance IT/Technical Healthcare Temporary -32 -3 +49 +27.5 +.4 -7.1 -1.6 -10 +8.6 +10.6 -11.4 In thousands Sector changes for January
Education continues to be the job search differentiator…
ere Source: USA Today Analyst prediction: Jobs to pick up in 2011
<ul><li>The January jobs report showed fewer job gains but a significantly lower unemployment rate… </li></ul><ul><li>Opportunities </li></ul><ul><ul><li>Analysts attribute the small number of job gains to the winter weather </li></ul></ul><ul><ul><li>The loss of temporary jobs is also considered by many to be attributable to the weather’s impact on productivity </li></ul></ul><ul><ul><li>The upcoming months will indicate if the drop in the unemployment rate is accurate or an anomaly </li></ul></ul><ul><ul><li>Average weekly earnings increased by $.08 </li></ul></ul><ul><li>Weaknesses </li></ul><ul><ul><li>The slow but positive progress of job gains indicates the economy is growing, but at a slower than ideal pace </li></ul></ul><ul><ul><li>The average workweek fell to 34.2 hours, increasing workweek lengths are often a sign of hiring to come </li></ul></ul><ul><ul><li>2011 will need to add 200,000-300,000 jobs a month in order to sufficiently reduce the unemployment rate </li></ul></ul>In summary