UNDERSTANDING JOB STATISTICS

THE REAL PICTURE IS MURKY 

We’re beginning to see signs of a definite trend developing in the labor markets.

• The January employment rate as reported by the Bureau of Labor Statistics shows non-farm payrolls for the month were up 36,000;
• The increase was projected to be 146,000; the 110,000 difference was likely due to winter storms;
• The jobless rate fell to 9%, the lowest rate since April of 2009;
• Many experts expect a major jump of 200,000 in March based on last year, when a similar number of 35,000 new jobs was reported in February and was followed by a jump of 196,000 in March of 2010;
• A cautionary note about the drop to 9% – it is believed that 600,000 job seekers were not counted because they were unable to actively look for work due to the same terrible storms that blanketed the country;
• Manufacturing activity increased in January to its fastest pace in 6 years with vehicle sales and retail sales showing significant increases. Manufacturing added 46,000 new jobs even though weather hindered the transportation and construction sectors;
• Overall unemployment according to the BLS U – 6 report, which includes people who are underemployed, was 16.1% in January, the lowest it has been in 2 years, and finally;
• The number of people who are without jobs and including people who are not actively looking but want a job, climbed by 431,000 to 6.65 million according to Seabreeze Partners. If these people were counted, the unemployment rate would be 12.5%.

All of the above data indicates a rebound in the jobs numbers. Keep in mind however, that at this late stage of the recovery, jobs remain difficult to get and Fed chief Ben Bernanke reaffirmed in Congressional testimony last week that he still believes it will take another 4 – 5 years to recover from jobs lost during the recession. Let’s hope he’s wrong.