We’ll keep updating this post with analysis as we make our way through it, but for now here’s the link and an excerpt from the report itself is below.
Updates:
1) The headline number is way below the consensus expectation of +145k and even further below the giddy market whispers before release time.
2) The revisions for the previous two months were disappointingly low — from 71,000 to 93,000 for November, and 103,000 to 121,000 for December. Here are the last six months’ numbers, after revisions:
August: -1,000
September: -24,000
October: 210,000
November: 93,000
December: 121,000
January: 36,000
(August and September include people who lost temporary jobs doing the census.)
Following last month’s numbers we suggested that seasonal adjustments were having a skewing affect — this appears to be the case but the size is not as big as we expected.
3) It seems like another significant divergence between the messages sent by the household survey, which reported no change in the labour force and a decline of 600,000 in the number of unemployed, and the establishment survey, which reported the weak growth in payrolls. This is a very peculiar report, at least upon first glance.
4) And at second glance. Here are the benchmark revision:
The total nonfarm employment level for March 2010 was revised downward by 378,000 (411,000 on a seasonally adjusted basis). The previously published level for December 2010 was revised downward by 452,000(483,000 on a seasonally adjusted basis).
So, benchmarks down, payroll growth present but weak, labour force flat, unemployment rate down. What a muddle — why?
The answer for these peculiarities may lie in population revisions. From the note at the bottom of the release:
The revised data for April 2010 forward incorporate the effect of applying the rate of change measured by the sample to the new benchmark level, as well as updated net business birth/death model adjustments and new seasonal adjustment factors. The November and December 2010 revisions also reflect the routine incorporation of additional sample receipts into the November final and December second preliminary estimates.
Add to this the incorporation of new population estimates from January 2011 and those month on month changes aren’t particularly helpful when viewed in isolation.There’s a symphonic type of noise in this report so be careful in drawing conclusions — good or bad — from the headline number.
As Marc Ostwald argues (first quote from a preview to the release; second following publication):
for all that a lot of the anecdotal evidence on the state of the US labour market has been reasonably positive, there are so many wildcard elements to this month’s report which render the anecdotal evidence as little more than an “amuse gueule”. Those wildcards range from weather effects, through the massive seasonal adjustment for the month (frequently up to 1 million), the annual benchmark revisions which will be announced with the report, the near certainty of the usual substantial revisions to the most recent months’ reports (December prelim +103K, Nov +71K from a provisional +39K and October +210K from a provisional +172K).
…
other than the observations on manufacturing and agriculture, it would appear to us that extrapolating anything from either the January or the revised December Payrolls data, let alone the Household survey, is at best tenuous,
5) From the household data, another big drop in U-6, to 16.1 per cent from 16.1 per cent (click to expand):
6) Long-term unemployment (>27 weeks) remains terribly high at 43.8 per cent — a smidgen down from last month’s 44.3 per cent rate. However, with the rate of those unemployed for between 15-26 weeks rising to 16.1 per cent from 15.2 per cent, don’t expect this to come down noticeably any time soon.
7) There is, however, a little bit of good news amidst the imbroglio. BLS estimates that 886k were kept from work in survey week by the weather — sampling scepticism required here but this is a hefty number all the same. And the 49k rise in manufacturing payrolls is the best since August 1998. (H/T Marc Ostwald.)
Here’s a chart of the movements courtesy of Calculated Risk (click to expand):
Here are some links to further comment: Felix Salmon, Calculated Risk (and here), Center for Budget and Policy Priorities, Big Picture.
By Cardiff Garcia and John McDermott
___________
Release
The unemployment rate fell by 0.4 percentage point to 9.0 percent in January, while nonfarm payroll employment changed little (+36,000), the U.S. Bureau of Labor Statistics reported today. Employment rose in manufacturing and in retail trade but was down in construction and in transportation and warehousing. Employment in most other major
industries changed little over the month.Household Survey Data
The unemployment rate (9.0 percent) declined by 0.4 percentage point for the second month in a row. (See table A-1.) The number of unemployed persons decreased by about 600,000 in January to 13.9 million, while the labor force was unchanged. (Based on data adjusted for updated population controls. See table C.)
Among the major worker groups, the unemployment rates for adult men (8.8 percent), whites (8.0 percent), and Hispanics (11.9 percent) declined in January. The unemployment rates for adult women (7.9 percent), teenagers (25.7 percent), and blacks (15.7 percent) were little changed. The jobless rate for Asians was 6.9 percent, not seasonally adjusted. (See tables A-1, A-2, and A-3.)
The number of job losers and persons who completed temporary jobs fell from 8.9 to 8.5 million in January. The number of long-term unemployed (those jobless for 27 weeks or more) edged down to 6.2 million and accounted for 43.8 percent of the unemployed. (See tables A-11 and A-12.)
After accounting for the annual adjustment to the population controls, the employment-population ratio (58.4 percent) rose in January, and the labor force participation rate (64.2 percent) was unchanged. (See tables A-1 and C.)
The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) declined from 8.9 to 8.4 million in January. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job. (See table A-8.)
In January, 2.8 million persons were marginally attached to the labor force, up from 2.5 million a year earlier. (These data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. (See table A-16.)
Among the marginally attached, there were 1.0 million discouraged workers in January, about the same as a year earlier. (These data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.8 million persons marginally attached to the labor force had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities. (See table A-16.)
Establishment Survey Data
Total nonfarm payroll employment changed little in January (+36,000). Manufacturing and retail trade added jobs over the month, while employment declined in construction and in transportation and warehousing. Since a recent low in February 2010, total payroll employment has increased by an average of 93,000 per month. (See table B-1.)
Manufacturing added 49,000 jobs in January. Over the month, job gains occurred in durable goods, including motor vehicles and parts (+20,000), fabricated metal products (+13,000), machinery (+10,000), and computer and electronic products (+5,000). Employment in nondurable goods manufacturing declined by 13,000 over the month.
Employment in retail trade rose by 28,000 in January, after changing little in December. Retail trade has added 123,000 jobs since its recent low point in December 2009. In January, employment in clothing stores increased by 15,000.
Health care employment continued to trend up over the month (+11,000). Over the prior 12 months, health care had added an average of 22,000 jobs per month.
In January, construction employment declined by 32,000. Within construction, there were job losses among nonresidential specialty trade contractors (-22,000) and in construction of buildings (-10,000). Employment in construction may have been impacted by severe winter weather affecting parts of the country during the survey reference period. (See the Frequently Asked Questions.)
Transportation and warehousing employment fell by 38,000 in January, reflecting a sharp decline among couriers and messengers (-45,000). Couriers and messengers had an unusually large job gain in December, followed by layoffs of a similar magnitude in January.
Within professional and business services, employment in temporary help services was little changed in January (-11,000). Temporary help had added an average of 25,000 jobs per month over the prior 12 months.
The average workweek for all employees on private nonfarm payrolls fell by 0.1 hour to 34.2 hours in January. The manufacturing workweek for all employees rose by 0.1 hour to 40.5 hours, while factory overtime remained at 3.1 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls declined by 0.1 hour to 33.4 hours; the workweek fell by 1.0 hour in construction, likely reflecting severe winter weather. (See tables B-2 and B-7.)
In January, average hourly earnings for all employees on private nonfarm payrolls increased by 8 cents, or 0.4 percent, to $22.86. Over the past 12 months, average hourly earnings have increased by 1.9 percent. In January, average hourly earnings of private-sector production and nonsupervisory employees rose by 10 cents, or 0.5 percent, to $19.34. (See tables B-3 and B-8.)
The change in total nonfarm payroll employment for November was revised from +71,000 to +93,000, and the change for December was revised from +103,000 to +121,000. Monthly revisions result from additional sample reports and the monthly recalculation of seasonal factors. The annual benchmark process also contributed to these revisions.