A most curious jobs report, to be sure. Job losses fell 20,000 in January, but the unemployment rate also fell, to 9.7% from 10%. Neither occurrence was expected, and now the markets are being thrown into another tizzy over it. Is it good? Is it bad? Is it noise?
Market’s don’t seem particularly pleased: DJIA was down as much as 76, although it’s coming back, down only 28 currently. S&P 500 slipped as low as 1055.55, and you wonder if there’s some minor support there.
Here’s some observations from Newswires’ long-time economics reporter Kathleen Madigan that should help you suss it all out.
- January jobs report — down 20,000, unemployment rate at 9.7% — was influenced by several special factors that may not be consistent with the underlying jobs trend. Temporary hiring for the US 2010 census collection helped (added 9,000 jobs), while the unusually cold weather probably hurt it. Even so, the number is a big disappointment for those hoping the US began 2010 with jobs finally growing again.
- The employment report is confusing: jobs lost but unemployment down. But each measure of labor markets comes from two different surveys. Companies and governments surveyed for Labor’s establishment survey said they cut 20,000 jobs, on net. But households surveyed by the Labor Dept. said that 541,000 more jobs were created last month, helping to bring down the jobless rate. Gaps between both surveys are not unusual, but it suggests more people have struck out on their own or are working for companies too small to be captured by Labor’s survey.
- The number of discouraged workers rose to 1.06 million in January. The number is not adjusted, so monthly comparison are iffy. But compared to last January, the number of people who have given up looking for work is up 331,000.
- Amid the weaker-than-expected jobs report, at least November hiring was better than expected. The Labor Dept.’s revisions show jobs grew 64,000 that month, up from 4,000 reported earlier. Even so, the new data show payrolls ended 2009 1.3 million less than thought previously.
- Businesses continue to focus on using temp workers to increase output. Temporary help slots rose another 52,000 in January. While any job is usually better than no job, the short-term nature of temp help won’t make US workers feel more secure about the labor situation.
- Private payrolls fell 12,000 in January as hiring at service providers and manufacturers offset some of the losses in construction. The federal government added only 9,000 census workers last month, a bit less than many economists expected. The big layoffs occurred in state and local governments where losses were 18,000 and 23,000, respectively.