Today’s employment report was, well, discouraging. Or was it? The range of opinion was unusually wide, or so it seems.
The reported facts, at least, are clear. Quoting from the Labor Department’s press release, “The unemployment rate fell from 10.0 to 9.7% in January, and nonfarm payroll employment was essentially unchanged (-20,000), the U.S. Bureau of Labor Statistics reported today. Employment fell in construction and in transportation and warehousing, while temporary help services and retail trade added jobs.”
But that’s just the beginning. Or is it the end? You decide. Here’s a sampling of the commentary on today’s numbers that, for one reason or another, caught our attention…
● “The question is, what is the rate of improvement going to be? Very slow. We don’t see companies going crazy on the hiring.”
Joshua Shapiro, chief United States economist at MFR Inc.
New York Times
● “Today’s employment report from the Bureau of Labor Statistics, showing that unemployment fell to 9.7 percent in January, provides fresh evidence that the labor market has stabilized and our nation has turned a corner.”
Rep. Carolyn Maloney, congresswoman (D-NY)
● “The Bureau of Labor Statistics (BLS) employment report for January contains mixed signals about the job market’s emergence from the 2008-2009 recession. The household survey showed a sizeable drop in the unemployment rate – down 0.3 percentage points from December 2009 and down 0.4 percentage points since the peak unemployment rate in October. The fall in unemployment cannot be explained by a rise in the number of discouraged workers or any further decline in the labor force participation rate. On the contrary, the household survey shows a rise in the participation rate. The reason unemployment fell is that the number of Americans who report being employed rose substantially. This is heartening news.”
Gary Burtless, Senior Fellow, economic studies
● “The drop in the unemployment rate, from 10% to 9.7%, is grabbing a lot of attention, but I’d suggest that’s not providing the most accurate picture of the labour market. Looking instead at the establishment data, we see that the employment picture was more or less flat in January (payrolls officially fell by 20,000), but that labour markets are struggling to climb out of a much deeper hole than was initially realised…”
The Economist.com blog
● “The latest unemployment rate of 9.7 percent is an unexpected jolt of good news. That’s down from 10 percent in December and even lower than the 9.8 percent the Obama administration projects for the end of this year. That encouraging number raises an obvious question: Is it an aberration or a positive indication that we are indeed coming out of the recession in the only way that matters to most people, the ability to readily find work? Buried in the numbers there is reason to hope.”
Dale McFeatters, Scripps Howard News Service
● “Today’s report contained the much-awaited annual benchmark adjustment that added 930,000 lost jobs which had not been counted between April 2008 and March 2009. Since the start of the recession in December 2007, payroll employment has fallen by 8.4 million. Before today’s adjustment, job losses had totaled 7.2 million. The adjustment happens every year, but this year’s is especially large. A number of economists blame the BLS’s birth-death model for the problem. This is a 10-year-old formula for calculating the number of jobs created as businesses are born and die. The trouble is that it doesn’t seem to work very well in a recession. And while we now know how many lost jobs it didn’t count nearly a year ago, we won’t know until a year from now how many jobs the birth-death model will have miscalculated from April 2009 until March 2010. We do know the the model ‘created’ nearly a million jobs in the nine months ending in December. How many of them are real?”
● “…much of the job growth in the past has been in the public sector and through gimmicks such as the so-called ‘cash for clunkers,’ and this is unsustainable as a foundation for long-term economic growth. While private industry appears to be replenishing depleted inventories, many manufacturers are skittish about significantly increasing production to meet rising consumer demand that may not be there. This is still a very risk-averse economic environment.”
Samuel R. Staley, director of Urban & Land Use Policy at the Reason Foundation
● “With the unemployment rate falling from 10.0 to 9.7 the employment report implies that the economy is in a transition phase. The period of widespread layoff and job cuts is over. So if you still have a job the odds of your losing it have roughly returned to normal. This change is reflected in the improvement in personal confidence. But firms have not yet begin widespread hiring. So if you are still looking for a job it is going to be rough.”
And, finally, a picture really is worth a thousand words, courtesy of Calculated Risk.