U.S. Unemployment Fell to 9.7% in January; Payrolls Drop 20,000

[TomClash]

Source: Bloomberg

By Timothy R. Homan

Feb. 5 (Bloomberg) -- The unemployment rate in the U.S. unexpectedly declined in January to 9.7 percent, the lowest level since August, while payrolls dropped as companies boosted worker hours and overtime instead of taking on new hires.

Payrolls fell 20,000 last month, reflecting a plunge in construction employment and a drop in state and local government hiring, figures from the Labor Department in Washington showed today. The factory workweek and overtime hours both increased.

Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=aMgidOoKS.dI&pos=1

---

Payrolls drop, unemployment decreases - people are being dumped off the rolls.

[Pirate Smile]

1. Survey's are different. Household survey showed 500,000 + hires. Household survey includes

small businesses which the other survey (which showed 20,000 drop) doesn't.'

Household (unemployment rate%) is based on a phone survey while the other # showed 20,000 drop is from a survey of employers - mostly larger employers and misses what smaller businesses do.

Edit to add:

Household Survey - Survey of 50,000 Households, said to capture more small businesses:

Unemployment Rate: down to 9.7%
Employment: + 540,000
Unemployment: -430,000



Payroll Survey - measures employment as reported by 300,000 businesses:

Employment: - 20,000

Real Unemployment Rate (which includes discouraged workers) went down significantly from 17.4% to 16.5%

Good signs for future hiring - temp hiring is up and the work week hours went up.

January Job Gains(from Payroll survey, not Household):

Manufacturing +11,000
Services +40,000
Retail +42,000
Temp Help +52,000 (good signal for future hires - use temps before take the leap to perm hires)

January Job losses:

Goods Producing -60,000
Construction -75,000
Financial Activities -16,000
Leisure/Hospitality -14,000

Overtime #'s also went up which is a good sign because they will work their current employees as much as possible before they hire more people so it is a sign of future hiring.

[TomClash]

3. I think the household survey is notoriously inaccurate

I agree on the weird numbers though.

[karynnj]

4. Thanks for this information

[dotymed]

38. yesterday the "headline" was

that unemployment rates greatly increased in January......:wtf:

[DCBob]

2. Perhaps this will stabilize the markets...

We were headed for a black friday..

[Roland99]

6. Futures reversed quickly

DJIA was -61 earlier. Now:

S&P 500 1,061 -0.30 -0.03%
DOW 9,980 +1.00 0.01%
NASDAQ 1,732 +2.25 0.13%

[DCBob]

9. yes I saw that..

wonder if it will hold throughout the day.

[Political Heretic]

5. I'm all for lower U3 numbers. Believe me. But we need to press beyond the headline too.

First things first, I don't know anyone in their right mind who isn't happy with a lower unemployment number, even one as largely lowballed as the U3 number.

Having said that, I agree with the OP and think its extremely important that we look beneath the headline and try to understand what's going on. This is about understanding next steps for recovery, not politics. As far as the politics goes, good news for the administration to be sure.

But we've got people whose unemployment benefits have expired who are still without jobs and aren't getting counted in a U3 number. Payrolls dropping and unemployment dropping is kind of a scary sign that might suggest more unemployed people aren't being counted by U3 measurement.

It would be interesting to get the U6 measurement and compare the difference, and note a rise or fall in the U6 number because that could be very telling. If U3 is down from last month but U6 is up that's a pretty interesting indicator that suggests what's happening is more people are falling off the rolls, not getting more jobs. And we need that information - whether its good or bad for us - in order to advocate good recovery policy.

If both the U3 and U6 numbers dropped, that's interesting too. Figuring out what contributed to the decline is the tricky part. Actually, we'd have to first ask the question is this decline statistically significant in the first place? Given the size of the drop, I'd tend to assume that it is, but I'm not an expert on that.

I'll be reading the report later today after I get some sleep.

[DCBob]

8. What's significant is that it did not go up..

That signals we are headed in the right direction.

[Political Heretic]

13. Not so fast... a quick look suggests these numbers are pretty cooked.

We lost 20,000 jobs last month, the report says that payrolls did not increase. You can't get a decrease in unemployment from that information without cheating...

....so then I look a little further and, lo and behold, they moved a ton of people into the "discouraged worker" category which they simply STOP COUNTING in an unemployment number.

Voila! A drop in unemployment with losing jobs and not adding payroll.

Fucking brilliant.

I'm going to bed. I hate fucking politics sometimes.

[DCBob]

14. Cooked? Dont they have a standard way of calculating these numbers?

I hate politics too but this is "good" news even if a bit misleading.

[Political Heretic]

27. The "standard" has been cooked for a long time, I'm not blaming this adminsitration for it.

But we need to keep countering the bullshit about unemployment with accurate analysis.

And no, its not really "good news" - shedding 20,000 more jobs isn't good. And a drop in unemployment that is only because you stopped counting people - you can see how that's not exactly good news, right?

[DCBob]

30. Shedding 20,000 is better than shedding 200,000...

right?

[pinqy]

31. all the measures of labor underutilization tend to move in the same direction

Table A-15 Alternative Measures of Labor Underutilization
U-1 Persons unemployed 15 weeks or longer, as a percent of the civilian labor force Dec 5.9, Jan 5.8

U-2 Job losers and persons who completed temporary jobs, as a percent of the civilian labor force Dec 6.3 Jan 6.1

U-3 Total unemployed, as a percent of the civilian labor force (official unemployment rate) Dec 10 Jan 9.7

U-4 Total unemployed plus discouraged workers, as a percent of the civilian labor force plus discouraged workers Dec 10.5 Jan 10.3

U-5 Total unemployed, plus discouraged workers, plus all other persons marginally attached to the labor force, as a percent of the civilian labor force plus all persons marginally attached to the labor force Dec 11.4 Jan 11.2

U-6 Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force Dec 17.3, Jan 16.5

[LongTomH]

49. Look over in the 'Not seasonally adjusted' columns

For Jan 2010, the figures are:

• U1 5.9
  
• U2 6.9
  
• U3 10.6
  
• U4 11.2
  
• U5 12.0
  
• U6 18.0
  

Fact: The figures aren't moving in the right direction. Nearly 1 in 5 of our citizens are either without work, or not working enough hours to pay the bills! And that may not be an accurate count; is anyone counting the homeless?

[pinqy]

52. Somehow I expect that last month....

When the unadjusted rate was 9.7 and the adjusted rate was 10.0 that you were touting the unadjusted number as the "real" number.

There are regular predictable fluctuations in the labor market. This time of year a lot of people lose their jobs. So how much of what we see is due to what happens every year at this time, and how much is the underlying trend? That's why seasonal adjustment is used, to reduce the noise of regular fluctuations. The seasonally adjusted numbers show what the underlying trend is, and that's an improvement in unemployement.

[LongTomH]

53. I use the unadjusted numbers because they ARE real numbers!

They represent real people lacking real jobs who are really suffering! A seasonal adjustment doesn't lower their level of pain one bit!

[pinqy]

56. Neither do the unadjusted numbers

The UE numbers aren't about lowering pain, it's about accurately measuring the DIRECTION of the labor market...and seasonal adjustment shows what the underlying trend is. Would you measure ocean levels and not account for the tide on the grounds that measuring the ocean at low tide is ther real number?

[Yavin4]

37. The Decrease In The U3 Rate Is Because Folks Stopped Looking

Not because their benefits expired.

[jpak]

58. GDP grows 4th Q @ 5.7%, unemployment drops 0.5% from the peak - is the is the end of DOOM

as we know it?

:shrug:






















:evilgrin:

[Pharaoh]

7. Ya think they will report it on Fox?

:toast:

[DCBob]

10. They will downplay it saying the numbers are misleading..

failmongers.

[onehandle]

20. 'Thousands of jobs still being lost under Obama. Now we go to a story about bikinis...' nt

[deacon]

23. Here, the BS Murdock owned WSJ headline.

Jobless Rate Rises; U.S. Shed Jobs Wall Street Journal

Democrats need to unite and start fighting back against these bums, AGAIN.

[earthside]

11. "Lies, Damn Lies and Statistics"

Those are the three kinds of lies according to Mark Twain.

Now, who out here in real America believes that unemployment fell .3 percent last month?

The cynicism is rising throughout the land because of this kind of manipulation of reality.

So, payrolls fell 20,000, but the pencil pushers figure out a way statistically to turn that into a good employment percentage.

It would be funny if it weren't so tragic.

[icee]

15. The lie is so overt as to be preposterous.

[icee]

12. Was this number plugged to avert a Black Friday?

[Submariner]

16. Karen Hughes must have been right last month - The Bush recovery plan

must be working. Stay tuned to Fox for updates.

:hide:

[deacon]

19. Those fantasy based useless bums offer nothing. n/t

[deacon]

17. The Democrats stopped the free fall with zero help from the GOP.

A free fall is going from 700,000 a month in job losses to 800,000 in job losses to 900,000 in job losses etc. Down to 20,000 is freaking great.

In year the Dems are kicking ass and taking names much to the chagrin of the GOP that wants Obama and America to fail so they can get the white house back.

[DCBob]

18. Correct. That is the real story here...

not nitpicking whether it's 9.7 or 9.9 or 10.1.

[deacon]

22. Murdock is such an asshole. He controls wayyyy to much of the news flow.

It infuriates me that that piece of shit drives thought. He's the ultimate control freak. It's why brown won. This congress for all it's faults, has done some excellent things that wouldn't even be discussed by the idea-less self serving GOP party.

As an example, take a look at this if you haven't seen it already.

A very productive Congress, despite what the approval ratings say
http://www.washingtonpost.com/wp-dyn/content/article/2010/01/29/AR2010012902516.html

Democrats have something to be proud of, it's just this freaking media keeps running us down.

[DCBob]

24. Murdock may be the most powerful and dangerous man in America.

Lies become truth when broadcasted non-stop 7x24x365.

[galileoreloaded]

26. Your sincere desire for redemption clouds your reality, friend.

The slide hasn't stopped, it is accelerating.

[DCBob]

29. Are you my friend??

Sure there are big/huge/massive problems looming but this is a bit of good news.. why spin it so negative? Seems you want this country to fail.

[galileoreloaded]

35. I desire honesty, truth, and transparency. I can deal with problems if I know what they are

and as an adult, I have the right to glimpse reality.

I don't need to be manipulated for my own good, I am adaptable.

I hope we can be friends.

[DCBob]

40. Then look at the big picture..

We were likley headed for a depression. That has not happened. The numbers have stabilized and beginnning, just beginning, to look better. That is good news no matter how you slice and dice the details.

[icee]

46. I agree. It affects my decision-making process. I knew the

unemployment number would be plugged last week. They've been doing this for years. Has nothing to do with Obama. In another month the figure will be revised. This is simply the way government works anymore. Just keeps getting worse. You have to be careful here of posting stuff that seems contra to the wishes of the MIC. A word to the wise . . .

[deacon]

33. You've been assimilated by the propagand machine. Enjoy. n/t

[TheWatcher]

51. No, I would actually say it's the other way around.

People who actually buy these numbers would be victims of that fate.

The Propaganda machine you speak of is the one that has been doing a brilliant job the past eleven months of selling the population of this country on a "Recovery" that unfortunately does not exist, no matter how badly they want to believe in it.

For many Americans, it is more important to feel good and have their perception managed than face reality.

The short term benefit is a warm Cocoon free of worry, and a euphoria of false hope that not only gets them through the day, but makes them think that things are actually changing.

The Long Term benefit for the country and the reality of the circumstances we are in, and the consequences they will bear?

Zero.

Part of the reason there can be no real change is because many Americans prefer a false reality instead.

The only thing it requires is the management of perception, and the carefully calculated act of not deviating from it. Many on DU have become so skilled at it, it's a pity that in the real world that some Corporation somewhere hasn't created a paid profession out of it. Many jobs could be created overnight.

Real Change?

That stuff's hard.

[treestar]

44. Based on what?

You do not even try to back up your assertion.

[TheWatcher]

48. Delete.

Definitely posted in the wrong place.

[WriteDown]

21. I will wait for the revised numbers. nt

[galileoreloaded]

25. Institutionalizing and cementing a permanant underclass via statistical manipulation, I am so proud.

Things are really looking up I tell you. FYI, Non-seasonally adjusted U-3 numbers are up almost 1% FROM LAST MONTH.

[KillCapitalism]

50. Nice chart

That right there tells the truth.

[eridani]

28. Lots of boomers going for early retirement and early Social Security

Is anyone even trying to measure that?

[DCBob]

32. Very possible..

Wish I could do that.. :)

[eridani]

45. I'm hoping that by living frugally in retirement, I will be able to leave the jobs

--to people who are in their family raising years.

[Beacool]

34. Some financial expert on the radio was saying that the figures are not good.

She explained that the drop off was due to the number of people who are no longer actively seeking employment and not because employers had hired more people.

:(

[deacon]

39. These shills,these losers can't comprehend a turnaround in any degree? So,

what would that asshole be saying if we were still losing 700,000 a month???

These proganda artists need to be flushed.

[treestar]

43. No one ever proves that assertion

Who gives us seeking employment? That would be stupid. The surest way of never finding a job. Yet this has been claimed for at least twenty years. I've been reading about this claim forever in left wing publications of all types and have always taken it with a grain of salt.

[deacon]

36. And, the GOP hates it. Why? Because they prefer 700,000 jobs lost every month. They

worked hard at it to put us there.

[Yavin4]

41. This Report Is Indeed Good News. Here's Why

In a year, the rate of job losses has gone from 700,000 a month to 20,000 a month which portends that it will go positive in the next month or so.

The UE rate is not that good of an indicator because if folks stop looking, then they're not counted. However, the job losses/job gained is indeed important because if that turns positive and keeps growing the overal rate will eventually decline. In fact, it may even pop a little higher as the folks who gave up start looking again.

The most important number is that only 20,000 jobs were slashed last month, and that is a positive trend in the right direction.

[treestar]

42. Still a good sign

People working extra hours will have more confidence - more money to spend. That will help stimulate things.

If temp hiring is a good sign, so is this.

[On the Road]

47. In Baltimore,

you can tell from the increased number of rental applicants that things are getting better. I predicted a 9.9% national figure, but thought that might be overly optimistic.

[napsi]

54. Please

The numbers reflect people who have left the job market. This is not good news. Govt jobs are a zero sum game. Taxing those who create jobs will do nothing but make the misery continue. I know, fuck those who have a few dollars more than you do............. I am not talking about the uber rich. I am talking about the plumber in your area that has 20 employees and 14 trucks. He continues to pay his employees, their health insurance and has not laid anyone off. He's the one that stands to get screwed in this deal. Flame away!

[DCBob]

55. This is why its good news...

[pinqy]

57. Except the Labor Force rose.

Yes, in the last few months a large reason for relatively stable UE rate and the drop from 10.2 to 10.0 was from a decrease in the Labor Force and an increase in Not in the Labor Force, but not January. The Labor Force grew and Not in the Labor Force went down.