Sunday, February 05, 2012 4:06:48 AM
Orders to U.S. Factories Rise
By Alex Kowalski - Feb 3, 2012 9:00 AM CT
Orders to U.S. factories increased in December for a second month, a sign manufacturing will strengthen even more.
Bookings (TMNOCHNG) rose 1.1 percent after a revised 2.2 percent gain in November that was larger than previously estimated, figures from the Commerce Department showed today in Washington. The order backlog jumped 1.4 percent, the most since March 2008.
Factories boosted payrolls in January by the most in a year and the number of hours worked per week climbed to the highest in 14 years, according to Labor Department figures today, showing how the need to rebuild inventories and replace outdated equipment will keep American industry humming. Nonetheless, a slowdown in Europe may limit gains in exports, representing a risk to American manufacturers.
“Manufacturing is doing quite well,” Michael Brown, an economist at Wells Fargo Securities LLC in Charlotte, North Carolina, said before the report. “Going forward, the year is off to a decent start in the manufacturing sector, but we need to make sure that orders continue to come in with the strength that we’ve seen in the last couple of months.”
Economists forecast factory orders would rise 1.5 percent, according to the median of 64 projections in a Bloomberg News survey. Estimates ranged from declines of 1 percent to gains of 2.5 percent. The Commerce Department revised the November gain up from a previously estimated 1.8 percent increase.
Employment climbed more than forecast in January and the jobless rate unexpectedly fell to the lowest in three years, the Labor Department’s report also showed today.
Payrolls Jump
The 243,000 increase in payrolls was the biggest since April and exceeded all forecasts in a Bloomberg News survey. The unemployment rate dropped to 8.3 percent, the lowest since February 2009.
The factory workweek climbed to 41.9 hours, the most since 1998, and overtime also increased.
Orders for goods meant to least at least three years increased 3 percent, the Commerce Department report showed. The reading was the same as the government estimated in a Jan. 26 report.
Orders for capital goods excluding aircraft and military equipment, a measure of future business investment, climbed 3.1 percent after falling 1.5 percent in November. The gain was larger than estimated last week.
Shipments of such equipment, which are used in calculating gross domestic product, also increased 3.1 percent after a 0.9 percent drop in November.
More Shipments
Some of the shipment gains may reflect businesses using their last chance to qualify for a government tax credit that allowed for 100 percent depreciation on equipment purchases. The allowance this year dropped to 50 percent.
Business investment remained a bright spot for the world’s largest economy last quarter. Corporate spending on equipment and software rose at a 5.2 percent annual rate from October through December. While down from the prior period’s 16 percent gain, today’s report indicates it will rebound early this year.
Bookings for non-durable goods, including petroleum and chemicals, fell 0.4 percent, today’s report showed.
Factory inventories climbed 0.1 percent in December, and manufacturers had enough goods on hand to last 1.33 months at the current sales pace, down from 1.34 the prior month.
While weaker demand from Europe and China could slow factory lines, manufacturing has continued to boost production. The Institute for Supply Management (NAPMPMI)’s factory index rose in January to the highest level in seven months.
Factory Hiring
Paccar Inc. (PCAR), the maker of Kenworth and Peterbilt trucks, said it estimates U.S. and Canadian truck sales will rise by around 14 percent in 2012. The Bellevue, Washington-based company’s “customers are feeling better than they did a few years ago,” and businesses that produce components for other manufacturers are ‘feeling a little bit better as they go into 2012,” said Chief Executive Officer Mark Pigott.
“I think that challenges of probably last summer and early fall where many suppliers were just still not convinced that this market was going to continue, they’ve now probably mostly come to the realization that the market looks to be pretty good,” Pigott said in a Jan. 31 conference call.
Vehicle demand should also drive production. Cars and light trucks sold at a 14.1 million annual rate last month, according to industry data. Excluding a surge in August 2009 that reflected the government’s “cars-for-clunkers” program, it was the strongest month since May 2008.
To contact the reporter on this story: Alex Kowalski in Washington at akowalski13@bloomberg.net
To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net
©2012 BLOOMBERG L.P.
http://www.bloomberg.com/news/2012-02-03/orders-to-u-s-factories-rise.html
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U.S. Employment Situation Report for January (Text)
By Kristy Scheuble - Feb 3, 2012 7:31 AM CT
Following is the text of the January employment report from the Labor Department.
THE EMPLOYMENT SITUATION -- JANUARY 2012
Total nonfarm payroll employment rose by 243,000 in January, and the unemployment rate decreased to 8.3 percent, the U.S. Bureau of Labor Statistics reported today. Job growth was widespread in the private sector, with large employment gains in professional and business services, leisure and hospitality, and manufacturing. Government employment changed little over the month.
Changes to The Employment Situation Data Establishment survey data have been revised as a result of the annual benchmarking process and the updating of seasonal adjustment factors. Also, household survey data for January 2012 reflect updated population estimates.
Household Survey Data\
The unemployment rate declined by 0.2 percentage point in January to 8.3 percent; the rate has fallen by 0.8 point since August. The number of unemployed persons declined to 12.8 million in January. (See the note and tables B and C for information about annual population adjustments to the household survey estimates.)
Among the major worker groups, the unemployment rates for adult men (7.7 percent) and blacks (13.6 percent) declined in January. The unemployment rates for adult women (7.7 percent), teenagers (23.2 percent), whites (7.4 percent), and Hispanics (10.5 percent) were little changed. The jobless rate for Asians was 6.7 percent, not seasonally adjusted.
In January, the number of job losers and persons who completed temporary jobs fell to 7.3 million. The number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 5.5 million and accounted for 42.9 percent of the unemployed.
After accounting for the annual adjustments to the population controls, the employment-population ratio (58.5 percent) rose in January, while the civilian labor force participation rate held at 63.7 percent.
The number of persons employed part time for economic reasons, at 8.2 million, changed little 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.
In January, 2.8 million persons were marginally attached to the labor force, essentially unchanged from a year earlier. (The 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.
Among the marginally attached, there were 1.1 million discouraged workers in January, little different from a year earlier. (The 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 1.7 million persons marginally attached to the labor force in January had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities.
Establishment Survey Data
Total nonfarm payroll employment rose by 243,000 in January. Private-sector employment grew by 257,000, with the largest employment gains in professional and business services, leisure and hospitality, and manufacturing. Government employment was little changed over the month.
Professional and business services continued to add jobs in January (+70,000). About half of the increase occurred in employment services (+33,000). Job gains also occurred in accounting and bookkeeping (+13,000) and in architectural and engineering services (+7,000).
Over the month, employment in leisure and hospitality increased by 44,000, primarily in food services and drinking places (+33,000). Since a recent low in February 2010, food services has added 487,000 jobs.
In January, health care employment continued to grow (+31,000). Within the industry, hospitals and ambulatory care services each added 13,000 jobs.
Wholesale trade employment increased by 14,000 over the month. Since a recent employment low in May 2010, wholesale trade has added 144,000 jobs.
Employment in retail trade continued to trend up in January. Job gains in department stores (+19,000), health and personal care stores (+7,000), and automobile dealers (+7,000) were partially offset by losses in clothing and clothing accessory stores (-14,000). Since an employment trough in December 2009, retail trade has added 390,000 jobs.
In January, employment in information declined by 13,000, including a loss of 8,000 jobs in the motion picture and sound recording industry.
In the goods-producing sector, manufacturing added 50,000 jobs. Nearly all of the increase occurred in durable goods manufacturing, with job growth in fabricated metal products (+11,000), machinery (+11,000), and motor vehicles and parts (+8,000). Durable goods manufacturing has added 418,000 jobs over the past 2 years.
Employment in construction increased by 21,000 in January, following a gain of 31,000 in the previous month. Over the past 2 months, nonresidential specialty trade contractors added 30,000 jobs.
Mining added 10,000 jobs in January, with most of the gain in support activities for mining (+8,000). Since a recent low in October 2009, mining employment has expanded by 172,000.
Government employment changed little in January. Over the past 12 months, the sector has lost 276,000 jobs, with declines in local government; state government, excluding education; and the U.S. Postal Service.
The average workweek for all employees on private nonfarm payrolls was unchanged in January. The manufacturing workweek increased by 0.3 hour to 40.9 hours, and factory overtime increased by 0.1 hour to 3.4 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged up by 0.1 hour to 33.8 hours.
In January, average hourly earnings for all employees on private nonfarm payrolls rose by 4 cents, or 0.2 percent, to $23.29. 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 edged up by 2 cents, or 0.1 percent, to $19.62.
The change in total nonfarm payroll employment for November was revised from +100,000 to +157,000, and the change for December was revised from +200,000 to +203,000. Monthly revisions result from additional sample reports and the monthly recalculation of seasonal factors. The annual benchmark process also contributed to these revisions.
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The Employment Situation for February is scheduled to be released on Friday, March 9, 2012, at 8:30 a.m. (EST).
To contact the reporter on this story: Kristy Scheuble in Washington at kmckeaney@bloomberg.net
To contact the editor responsible for this story: Marco Babic at mbabic@bloomberg.net
©2012 BLOOMBERG L.P.
http://www.bloomberg.com/news/2012-02-03/u-s-employment-situation-report-for-january-text-.html
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Job Gains Reflect Hope a Recovery Is Blooming
A job applicant received assistance at an employment fair in Modesto, Calif., this week.
Joan Barnett Lee/The Modesto Bee, via Associated Press
By MOTOKO RICH
Published: February 3, 2012
The front wheels have lifted off the runway. Now, Americans are waiting to see if the economy can truly get aloft.
With the government reporting that the unemployment rate and the number of jobless fell in January to the lowest levels since early 2009, the recovery seems finally to be reaching American workers.
The Labor Department’s latest snapshot of the job market, released on Friday, makes clear that employers have been hiring more in recent months, with 243,000 net new jobs in January. The unemployment rate now stands at 8.3 percent, down from 8.5 percent a month earlier and from 9.1 percent as recently as last August.
Economists were encouraged, though they expect some fits and starts along the road to recovery.
“I do think we’re at the point where we’re in a self-sustaining, positive reinforcing picture,” said Stuart G. Hoffman, chief economist for the PNC Financial Services Group.
Stocks rallied on the brightening outlook, reaching multiyear highs.
The report revealed job gains not just for the last month but for previous months. December job growth was revised to 203,000, from the original 200,000. The job gains for November, originally 100,000 jobs, were revised upward to 157,000, creating a picture of a job market that has been gathering steam.
The private sector remained the engine of growth. While federal agencies and local governments continued to lay off workers, businesses added 257,000 net new jobs in January. The biggest gains were in manufacturing, professional and business services, and leisure and hospitality.
Despite the promising numbers, various indicators create an ambiguous picture of the overall economic recovery.
Layoffs appear to be slowing as fewer people are filing claims for unemployment benefits, and factory orders have picked up.
Small businesses, though, are still not hiring much. And while sales of existing homes have started to rise, home prices continue to fall. Incomes are not growing and consumer spending is still restrained, and could come under further pressure with gas prices edging higher in recent months and as consumers revert to building up savings.
Seasonal factors may have inflated January hiring numbers in some industries, like restaurants or construction.
Steve Blitz, senior economist for ITG Investment Research, said the report nevertheless revealed strong increases in manufacturing and related job categories, like transportation and warehousing and wholesale trade. “You’ve got to give credit when things are moving in the right direction,” said Mr. Blitz, who has been cautious in heralding a recovery. “This is not a process that is going to be done in a month or two months or a year. It could take five or 10 years to get there.”
Others were unconvinced that the recent pace of job growth would be sustained, pointing to moderate consumer spending and mild economic growth, 1.7 percent last year.
“The problem is that there is this bifurcation here in the numbers,” said Bernard Baumohl, chief global economist at the Economic Outlook Group. “On the one hand we see rather impressive job growth, but on the other hand we’re also seeing other economic indicators that are telling us that the economy is fundamentally weak.”
Mr. Baumohl added, “We’re going to have to really very carefully dig deep below the surface for these and a lot of other economic statistics to find a consistency of what is happening in the U.S. economy.”
The unemployment rate appeared to be falling because people were genuinely securing jobs rather than merely leaving the work force. The Labor Department adjusted its data to account for new population estimates from the 2010 Census.
Accounting for those adjustments, the labor force had a net gain of 250,000 people in January from a month earlier. Although the pool of unemployed people has been shrinking, the number remains high — 12.8 million — about equal to the population of Pennsylvania, and long-term unemployment is one of the most crushing legacies of this recent recession. For January, the Labor Department reported that 5.5 million people had been out of work for six months or more, about 43 percent of the jobless.
And according to an analysis of December’s job numbers released this week by the Pew Fiscal Analysis Initiative, nearly a third of the jobless have been unemployed for a year or more.
Underemployment is another stubborn problem. The number of people working part time because they cannot find full-time work was 8.2 million in January. Including that group and the 1.1 million who stopped looking for work altogether, and the broader measure of unemployment was 15.1 percent.
“You have an interesting situation where you have some permanent part-time workers,” said John Silvia, chief economist at Wells Fargo. “These people are in jobs and the jobs are not likely to become full time.”
Sandy Pochapin, a 54-year-old former marketing manager, was laid off for the second time last May from a small business in Newton, Mass. Just before the start of the year she picked up a part-time job as a media consultant at an advertising agency. Her husband, a real estate lawyer, has also experienced severe cutbacks in his income.
The couple, who are now paying three times what they were paying for health care before Ms. Pochapin lost her job, have cut back on dinners out, and she said that replacing her eight-year-old Toyota Highlander was “not in the cards.” More painfully, the couple have dipped into their college-age son’s educational fund to keep up with mortgage payments and other expenses.
Ms. Pochapin, a member of several networking groups, compiles job leads and recently sent out a list with more openings than she had ever seen. “I would say things are picking up,” she said. “But where they’re picking up is not where people who have been unemployed long term have skills.” She noted many openings for jobs in mobile marketing and for digital media specialists.
Indeed, one of the perennial complaints of employers is that they cannot find qualified workers. Ancestry.com, a genealogy Web site in Provo, Utah, has openings for 150 engineers, data mining specialists and developers of mobile apps. “While we find a lot of people who are unemployed,” said Eric Shoup, a senior vice president, “they are not the people who bring the skill sets we need for our business.”
He said the company did virtually all its hiring away from other companies.
Economists are beginning to worry about the self-fulfilling nature of long-term unemployment. “It’s almost starting to look like there are two job markets,” said Cliff Waldman, the economist at the Manufacturers Alliance, a trade group. “Long-term unemployment is very sticky.”
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Related
Economix Blog: Wow. But Is the Number Real? (February 3, 2012)
http://economix.blogs.nytimes.com/2012/02/03/wow-but-is-the-number-real/
Economix Blog: Comparing Recessions and Recoveries: Job Changes (February 3, 2012)
http://economix.blogs.nytimes.com/2012/02/03/comparing-recessions-and-recoveries-job-changes-4/
Obama’s Magic Number May Be 150,000 Jobs Per Month (February 4, 2012)
http://www.nytimes.com/2012/02/04/business/economy/obamas-magic-number-may-be-150000-jobs-per-month.html
Jobless Rate Falls to 8.3%, Altering Face of Campaign (February 4, 2012)
http://www.nytimes.com/2012/02/04/us/politics/improved-job-picture-poses-risks-to-obama-and-romney.html
White House Offers Plan to Lure Jobs to America (February 3, 2012)
http://www.nytimes.com/2012/02/03/business/economy/a-lure-to-keep-jobs-made-in-america.html [the post to which this is a reply]
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© 2012 The New York Times Company
http://www.nytimes.com/2012/02/04/business/economy/us-economy-added-243000-jobs-in-january-unemployment-rate-is-8-3.html [with embedded links, graphic and video, and comments]
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Jobless rate at 3-year low as payrolls surge
Job seekers stand in line to speak with an employer at a job fair in San Francisco, November 9, 2011.
Credit: Reuters/Robert Galbraith
By Lucia Mutikani
Fri Feb 3, 2012 5:35pm EST
WASHINGTON (Reuters) - The United States created jobs at the fastest pace in nine months in January and the unemployment rate unexpectedly dropped to a near three-year low, giving a boost to President Barack Obama.
Nonfarm payrolls jumped 243,000, the Labor Department said on Friday, as factory jobs grew by the most in a year. The jobless rate fell to 8.3 percent - the lowest since February 2009 - from 8.5 percent in December.
The gain in employment was the largest since April and it far outstripped the 150,000 predicted in a Reuters poll of economists. It hinted at underlying economic strength and lessened chances of further stimulus from the Federal Reserve.
"More pistons in the economic engine have begun to fire, pointing to accelerating economic growth. One of the happiest persons reading this job report is President Obama," said Sung Won Sohn, an economics professor at California State University Channel Islands.
The payroll gains were widespread - from retail to temporary help, and from construction to manufacturing - an indication the recovery was becoming more durable.
A survey of households showed the unemployment rate declined even as new job seekers flooded into the labor force. Economists had expected the jobless rate, which has now fallen 0.8 percentage point since August, to hold steady.
"I think this is a sign that maybe the economy is reaching that holy grail of a self-sustaining economic expansion," Stuart Hoffman, chief economist at PNC Financial Services in Pittsburgh, told Reuters Insider.
The outlook was further brightened by a separate report showing service sector activity quickened last month to a near one-year high. A gauge of service sector employment touched a six-year high.
The fairly upbeat data buoyed stocks on Wall Street, with the tech-heavy Nasdaq Composite index hitting an 11-year high. The Dow Jones industrial average rose to a near four year high, while the Standard & Poor's index extended its 2012 advance to about 7 percent.
U.S. Treasury debt prices tumbled as investors dialed back expectations on Fed easing. The dollar was little changed against a basket of currencies after rising earlier in the session.
The employment report contrasted with a fairly glum assessment of the economy offered by the Fed last week.
Officials at the central bank have been debating whether to buy more bonds - a program dubbed QE3 - to drive interest rates lower. It also raised doubts about the Fed's expectation that it could hold interest rates near zero at least through late 2014.
"At the very least this scales back QE3 (quantitative easing) odds. The surprisingly persistent decline in the unemployment rate also calls into question how firmly wedded the Fed is to the late-2014 rate guidance," said Michael Feroli, an economist at JPMorgan in New York.
Interest rate futures indicated that at least some traders were beginning to lay bets the Fed could move interest rates up in early 2014.
Fed fund futures were pricing in a 38 percent chance of a January 2014 rate hike, up from 29 percent before the report, and the first better than even chance of a rate hike was in April 2014, according to CME Group, where the contracts are traded.
However, economists at most leading Wall Street firms still believe the Fed will undertake another bond-buying program, according to a Reuters poll.
DON'T MUCK IT UP
Obama welcomed the strong jobs report and urged Congress to extend a payroll tax cut and benefits for long-term unemployed, which expire at the end of this month.
"Now is not is not the time for self-inflicted wounds to our economy. I want to send a clear message for Congress. Do not slow down the recovery that we are on, don't muck it up," he said at a firehouse in Arlington, Virginia.
Republicans acknowledged the improvement in the labor market, but said the jobless rate was still too high.
"Our economy still isn't creating jobs the way it should be and that's why we need a new approach," said House Speaker John Boehner.
While employment growth has quickened there are no jobs for three out of every four unemployed people and 23.8 million Americans are either out of work or underemployed. The level of employment is still 5.57 million from its pre-recession level.
But steady progress is being made. The economy added 60,000 more jobs in November and December than previously reported.
In addition, average hourly earnings rose four cents, which should help to support spending. The report suggested that expectations of a slowdown in U.S. economic growth in the first quarter were not yet impacting on companies' hiring decisions.
Employment in the private sector surged 257,000 - the largest gain since April. Government payrolls fell 14,000, the least since September.
U.S. economic growth accelerated to a 2.8 percent annual rate in the final three months of 2011, but it was widely expected to slow as businesses ease back on efforts to rebuild inventories and exports slip amid a likely recession in Europe.
Some economists cautioned that January's jobs figures could overstate the pulse of the recovery, citing still lackluster consumer confidence, income and spending growth.
While some said the jobless rate could drop below 8 percent by year end, others warned it would likely move up in the near-term as people who had given up the search for a job re-enter the workforce.
"For this to mark an upturn in the labor market, then businesses will have to continue to hire on this scale throughout the winter," said Kathy Bostjancic, director of macroeconomic analysis at the Conference Board in New York.
CAUTIOUS OPTIMISM
The unemployment rate has now declined for five straight months, although part of the drop reflects discouraged Americans giving up the hunt for work.
A broad measure of unemployment, which includes people who want to work but have stopped looking and those working only part time but who want more work, slipped to a near three-year low of 15.1 percent in January from 15.2 percent in December.
Revisions to the payrolls figures showed 180,000 more jobs were created last year than previously believed.
Mild winter weather boosted employment last month in construction, which added 21,000 jobs after a 31,000 increase in December. Manufacturing payrolls surged 50,000, the largest gain in a year, after rising 32,000 the prior month.
Overall, the goods-producing sector added 81,000 jobs last month, the most since January 2006.
Transportation and warehousing employment increased 13,100 and courier jobs only fell 1,500. Last month, the Labor Department reported a large increase in courier jobs in December, but revisions showed they actually declined.
Retail employment rose 10,500 after gaining 6,200 in December. Temporary help services jumped 20,100 after rising 8,300, a potentially good sign for future permanent hiring.
(Reporting by Lucia Mutikani; Additional reporting by Ann Saphir in Chicago; Editing by Diane Craft)
Copyright 2012 Reuters
http://www.reuters.com/article/2012/02/03/us-usa-economy-idUSTRE7BM0AB20120203 [with comments]
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Unemployment report: January job gains have economists rethinking outlooks
[ http://www.washingtonpost.com/business/economy/us-employment-picture/2012/02/02/gIQAE9WjmQ_graphic.html ]
By Peter Whoriskey and David Nakamura, Published: February 3, 2012
An unexpectedly rosy jobs report set off a chain reaction Friday, upending economists’ gloomy predictions for the coming year, leading to a surge on Wall Street [ http://www.washingtonpost.com/business/markets/stock-futures-jump-after-us-jobs-report-shows-lower-unemployment-strong-job-growth/2012/02/03/gIQAYroimQ_story.html ] and potentially boggling the political calculus of the 2012 presidential campaigns.
The surprise — that the unemployment rate had dipped for the fifth straight month, to 8.3 percent — was first reflected in the stock market, where the Dow Jones industrial average soared to its highest mark since the beginning of the financial crisis. The tech-heavy Nasdaq, meanwhile, hit an 11-year high.
By noon, President Obama, whose reelection chances have been threatened by the nation’s economic woes, seized on the figures as proof that the recovery from the recession “is speeding up.”
“This morning we received more good news about our economy,” Obama said during an appearance at an Arlington firehouse [ http://www.washingtonpost.com/politics/obama-to-congress-dont-muck-it-up-200/2012/02/03/gIQAbwr4mQ_video.html ]. “Still, far too many Americans need a job or need a job that pays better than the one they have now. But the economy is growing stronger.”
The report forced his presidential rivals to adjust their rhetoric about the economy, which has played a leading role in the Republican debates. But they appeared ever ready to remind listeners that the unemployment rate remains elevated.
Exactly what lies ahead for the U.S. economy is far from clear. Even the more optimistic economists note that another downturn in Europe, or a spike in oil prices, or another debt showdown in Washington — or some other unexpected shock — could derail the nation’s unanticipated economic momentum.
But the Friday report depicted an economy that is gaining traction.
The number of jobs has been rising at a rate of 200,000 monthly, and those jobs are appearing in many parts of the economy, signaling a broad recovery. The growth was robust in the leisure and hospitality business, in the health-care industry and in manufacturing, which added 50,000 jobs, a higher monthly figure than at any time since 1998.
For the past few months, the stop-and-start economic recovery has shown tentative signs of unanticipated strength, and Friday’s report of another significant drop in the unemployment rate lent credibility to a bullish view, some economists said.
“This is a game changer,” Ian Shepherdson, chief U.S. economist at High Frequency Economics, said of Friday’s employment figures. “The payroll numbers validate, in the market’s eyes, what all the other data are saying.”
The nation’s economic forecasters, many of whom had predicted that the unemployment rate would remain stubbornly high this year, seemed to back off their gloomiest positions.
The Congressional Budget Office has predicted 8.9 percent unemployment for the year; the Federal Reserve has predicted between 8.2 percent and 8.5 percent for the year. Likewise, Moody’s Analytics had expected the unemployment rate to remain at 8.5 percent through the end of the year.
Moody’s Analytics, for one, is now reconsidering its predictions.“The collective psyche seems to be turning a bit more optimistic,” said Marisa Di Natale, the firm’s director of economic research. “We’re certainly going to revise our forecast.”
Startling numbers
The unemployment figures were startling enough that some analysts wondered whether they were correct. Friday’s figures from the household survey were the first to incorporate the new population numbers from the 2010 Census. But the new unemployment rate was unaffected by the change, the Labor Department said.
The nation’s economy has been central to the presidential campaign rhetoric so far, with Republican candidates chastising the Obama administration for failing to pull the country out of the recession more quickly.
Even with the new jobs figures, a central point of their attack remains unblunted [ http://www.washingtonpost.com/politics/if-recovery-strengthens-romneys-pitch-could-be-undercut/2012/02/03/gIQA3FSwnQ_story.html ]: The unemployment rate remains above 8 percent.
“Unfortunately, these numbers cannot hide the fact that President Obama’s policies have prevented a true economic recovery. We can do better,” former Massachusetts governor Mitt Romney said in a statement as he campaigned in Nevada the day before the state’s GOP caucuses.
Former House speaker Newt Gingrich, when asked on CNN whether Obama deserves any credit for the lower unemployment rate, scoffed: “Give him some credit. If it makes you happy, give him some credit.”
Obama’s campaign team, and some political scientists, believe that voters are more likely to be swayed by the direction the unemployment rate is moving — downward — rather than its exact level.
Jobs and the campaign
Lynn Vavreck, an associate professor of political science and communications at UCLA, has studied the effect of gross domestic product and the unemployment rate on presidential campaigns going as far back as 1952.
Her analysis shows that there appears to be little or no connection between an incumbent president’s vote share and the unemployment rate.
But there is a clear connection between votes for the incumbent and the direction the unemployment rate is moving.
“Is it good that the unemployment rate is dropping for Obama? Yes, it’s good,” Vavreck said. “Does it matter what it drops to? No. That’s actually pretty irrelevant.”
She said there is no particular “magic” unemployment rate that would guarantee his reelection.
“The trend since this president took office is what’s most significant,” said an Obama campaign official, speaking on the condition of anonymity to discuss strategy. “It’s the story over time as the president has taken action to address the historic economic challenges he faced when he came into office.”
On its Web site, the Obama campaign posted a chart that illustrated 23 consecutive months of private-sector job growth and encouraged supporters to e-mail it to friends “to make sure people know the good news about President Obama’s record on jobs.”
The chart included a summary of White House initiatives since Obama took office, including the Recovery Act, which provided a $787 billion stimulus; a bailout loan to the auto industry; and the payroll tax cut.
The campaign official said the chart had already become one of the campaign’s most popular social media items, having been e-mailed and posted on Facebook and Twitter hundreds of thousands of times by Friday afternoon.
Staff writers Felicia Sonmez and Philip Rucker in Washington and Paul Kane and Dan Balz in Nevada contributed to this report.
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More from The Washington Post:
U.S. adds 243K jobs in January
http://www.washingtonpost.com/business/economy/us-adds-243k-jobs-in-january-unemployment-rate-drops-to-83percent/2012/02/03/gIQAhV3mmQ_story.html
January jobs report: It's all good
http://www.washingtonpost.com/blogs/ezra-klein/post/the-january-jobs-report-its-all-good/2011/08/25/gIQAf7zkmQ_blog.html
Could the report be too pessimistic?
http://www.washingtonpost.com/blogs/ezra-klein/post/could-januarys-jobs-report-be-too-pessimistic/2012/02/03/gIQALt1pmQ_blog.html
Jobs report is good news for Obama
http://www.washingtonpost.com/blogs/the-fix/post/january-jobs-report-is-good-news-for-obama/2012/02/03/gIQA0wzkmQ_blog.html
Rubin: Drilling into the jobs data
http://www.washingtonpost.com/blogs/right-turn/post/drilling-down-on-the-new-jobs-report/2012/02/03/gIQA7KwvmQ_blog.html
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© 2012 The Washington Post
http://www.washingtonpost.com/business/economy/us-adds-243k-jobs-in-january-unemployment-rate-drops-to-83percent/2012/02/03/gIQAhV3mmQ_story.html [with comments]
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By Alex Kowalski - Feb 3, 2012 9:00 AM CT
Orders to U.S. factories increased in December for a second month, a sign manufacturing will strengthen even more.
Bookings (TMNOCHNG) rose 1.1 percent after a revised 2.2 percent gain in November that was larger than previously estimated, figures from the Commerce Department showed today in Washington. The order backlog jumped 1.4 percent, the most since March 2008.
Factories boosted payrolls in January by the most in a year and the number of hours worked per week climbed to the highest in 14 years, according to Labor Department figures today, showing how the need to rebuild inventories and replace outdated equipment will keep American industry humming. Nonetheless, a slowdown in Europe may limit gains in exports, representing a risk to American manufacturers.
“Manufacturing is doing quite well,” Michael Brown, an economist at Wells Fargo Securities LLC in Charlotte, North Carolina, said before the report. “Going forward, the year is off to a decent start in the manufacturing sector, but we need to make sure that orders continue to come in with the strength that we’ve seen in the last couple of months.”
Economists forecast factory orders would rise 1.5 percent, according to the median of 64 projections in a Bloomberg News survey. Estimates ranged from declines of 1 percent to gains of 2.5 percent. The Commerce Department revised the November gain up from a previously estimated 1.8 percent increase.
Employment climbed more than forecast in January and the jobless rate unexpectedly fell to the lowest in three years, the Labor Department’s report also showed today.
Payrolls Jump
The 243,000 increase in payrolls was the biggest since April and exceeded all forecasts in a Bloomberg News survey. The unemployment rate dropped to 8.3 percent, the lowest since February 2009.
The factory workweek climbed to 41.9 hours, the most since 1998, and overtime also increased.
Orders for goods meant to least at least three years increased 3 percent, the Commerce Department report showed. The reading was the same as the government estimated in a Jan. 26 report.
Orders for capital goods excluding aircraft and military equipment, a measure of future business investment, climbed 3.1 percent after falling 1.5 percent in November. The gain was larger than estimated last week.
Shipments of such equipment, which are used in calculating gross domestic product, also increased 3.1 percent after a 0.9 percent drop in November.
More Shipments
Some of the shipment gains may reflect businesses using their last chance to qualify for a government tax credit that allowed for 100 percent depreciation on equipment purchases. The allowance this year dropped to 50 percent.
Business investment remained a bright spot for the world’s largest economy last quarter. Corporate spending on equipment and software rose at a 5.2 percent annual rate from October through December. While down from the prior period’s 16 percent gain, today’s report indicates it will rebound early this year.
Bookings for non-durable goods, including petroleum and chemicals, fell 0.4 percent, today’s report showed.
Factory inventories climbed 0.1 percent in December, and manufacturers had enough goods on hand to last 1.33 months at the current sales pace, down from 1.34 the prior month.
While weaker demand from Europe and China could slow factory lines, manufacturing has continued to boost production. The Institute for Supply Management (NAPMPMI)’s factory index rose in January to the highest level in seven months.
Factory Hiring
Paccar Inc. (PCAR), the maker of Kenworth and Peterbilt trucks, said it estimates U.S. and Canadian truck sales will rise by around 14 percent in 2012. The Bellevue, Washington-based company’s “customers are feeling better than they did a few years ago,” and businesses that produce components for other manufacturers are ‘feeling a little bit better as they go into 2012,” said Chief Executive Officer Mark Pigott.
“I think that challenges of probably last summer and early fall where many suppliers were just still not convinced that this market was going to continue, they’ve now probably mostly come to the realization that the market looks to be pretty good,” Pigott said in a Jan. 31 conference call.
Vehicle demand should also drive production. Cars and light trucks sold at a 14.1 million annual rate last month, according to industry data. Excluding a surge in August 2009 that reflected the government’s “cars-for-clunkers” program, it was the strongest month since May 2008.
To contact the reporter on this story: Alex Kowalski in Washington at akowalski13@bloomberg.net
To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net
©2012 BLOOMBERG L.P.
http://www.bloomberg.com/news/2012-02-03/orders-to-u-s-factories-rise.html
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U.S. Employment Situation Report for January (Text)
By Kristy Scheuble - Feb 3, 2012 7:31 AM CT
Following is the text of the January employment report from the Labor Department.
THE EMPLOYMENT SITUATION -- JANUARY 2012
Total nonfarm payroll employment rose by 243,000 in January, and the unemployment rate decreased to 8.3 percent, the U.S. Bureau of Labor Statistics reported today. Job growth was widespread in the private sector, with large employment gains in professional and business services, leisure and hospitality, and manufacturing. Government employment changed little over the month.
Changes to The Employment Situation Data Establishment survey data have been revised as a result of the annual benchmarking process and the updating of seasonal adjustment factors. Also, household survey data for January 2012 reflect updated population estimates.
Household Survey Data\
The unemployment rate declined by 0.2 percentage point in January to 8.3 percent; the rate has fallen by 0.8 point since August. The number of unemployed persons declined to 12.8 million in January. (See the note and tables B and C for information about annual population adjustments to the household survey estimates.)
Among the major worker groups, the unemployment rates for adult men (7.7 percent) and blacks (13.6 percent) declined in January. The unemployment rates for adult women (7.7 percent), teenagers (23.2 percent), whites (7.4 percent), and Hispanics (10.5 percent) were little changed. The jobless rate for Asians was 6.7 percent, not seasonally adjusted.
In January, the number of job losers and persons who completed temporary jobs fell to 7.3 million. The number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 5.5 million and accounted for 42.9 percent of the unemployed.
After accounting for the annual adjustments to the population controls, the employment-population ratio (58.5 percent) rose in January, while the civilian labor force participation rate held at 63.7 percent.
The number of persons employed part time for economic reasons, at 8.2 million, changed little 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.
In January, 2.8 million persons were marginally attached to the labor force, essentially unchanged from a year earlier. (The 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.
Among the marginally attached, there were 1.1 million discouraged workers in January, little different from a year earlier. (The 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 1.7 million persons marginally attached to the labor force in January had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities.
Establishment Survey Data
Total nonfarm payroll employment rose by 243,000 in January. Private-sector employment grew by 257,000, with the largest employment gains in professional and business services, leisure and hospitality, and manufacturing. Government employment was little changed over the month.
Professional and business services continued to add jobs in January (+70,000). About half of the increase occurred in employment services (+33,000). Job gains also occurred in accounting and bookkeeping (+13,000) and in architectural and engineering services (+7,000).
Over the month, employment in leisure and hospitality increased by 44,000, primarily in food services and drinking places (+33,000). Since a recent low in February 2010, food services has added 487,000 jobs.
In January, health care employment continued to grow (+31,000). Within the industry, hospitals and ambulatory care services each added 13,000 jobs.
Wholesale trade employment increased by 14,000 over the month. Since a recent employment low in May 2010, wholesale trade has added 144,000 jobs.
Employment in retail trade continued to trend up in January. Job gains in department stores (+19,000), health and personal care stores (+7,000), and automobile dealers (+7,000) were partially offset by losses in clothing and clothing accessory stores (-14,000). Since an employment trough in December 2009, retail trade has added 390,000 jobs.
In January, employment in information declined by 13,000, including a loss of 8,000 jobs in the motion picture and sound recording industry.
In the goods-producing sector, manufacturing added 50,000 jobs. Nearly all of the increase occurred in durable goods manufacturing, with job growth in fabricated metal products (+11,000), machinery (+11,000), and motor vehicles and parts (+8,000). Durable goods manufacturing has added 418,000 jobs over the past 2 years.
Employment in construction increased by 21,000 in January, following a gain of 31,000 in the previous month. Over the past 2 months, nonresidential specialty trade contractors added 30,000 jobs.
Mining added 10,000 jobs in January, with most of the gain in support activities for mining (+8,000). Since a recent low in October 2009, mining employment has expanded by 172,000.
Government employment changed little in January. Over the past 12 months, the sector has lost 276,000 jobs, with declines in local government; state government, excluding education; and the U.S. Postal Service.
The average workweek for all employees on private nonfarm payrolls was unchanged in January. The manufacturing workweek increased by 0.3 hour to 40.9 hours, and factory overtime increased by 0.1 hour to 3.4 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged up by 0.1 hour to 33.8 hours.
In January, average hourly earnings for all employees on private nonfarm payrolls rose by 4 cents, or 0.2 percent, to $23.29. 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 edged up by 2 cents, or 0.1 percent, to $19.62.
The change in total nonfarm payroll employment for November was revised from +100,000 to +157,000, and the change for December was revised from +200,000 to +203,000. Monthly revisions result from additional sample reports and the monthly recalculation of seasonal factors. The annual benchmark process also contributed to these revisions.
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The Employment Situation for February is scheduled to be released on Friday, March 9, 2012, at 8:30 a.m. (EST).
To contact the reporter on this story: Kristy Scheuble in Washington at kmckeaney@bloomberg.net
To contact the editor responsible for this story: Marco Babic at mbabic@bloomberg.net
©2012 BLOOMBERG L.P.
http://www.bloomberg.com/news/2012-02-03/u-s-employment-situation-report-for-january-text-.html
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Job Gains Reflect Hope a Recovery Is Blooming
A job applicant received assistance at an employment fair in Modesto, Calif., this week.
Joan Barnett Lee/The Modesto Bee, via Associated Press
By MOTOKO RICH
Published: February 3, 2012
The front wheels have lifted off the runway. Now, Americans are waiting to see if the economy can truly get aloft.
With the government reporting that the unemployment rate and the number of jobless fell in January to the lowest levels since early 2009, the recovery seems finally to be reaching American workers.
The Labor Department’s latest snapshot of the job market, released on Friday, makes clear that employers have been hiring more in recent months, with 243,000 net new jobs in January. The unemployment rate now stands at 8.3 percent, down from 8.5 percent a month earlier and from 9.1 percent as recently as last August.
Economists were encouraged, though they expect some fits and starts along the road to recovery.
“I do think we’re at the point where we’re in a self-sustaining, positive reinforcing picture,” said Stuart G. Hoffman, chief economist for the PNC Financial Services Group.
Stocks rallied on the brightening outlook, reaching multiyear highs.
The report revealed job gains not just for the last month but for previous months. December job growth was revised to 203,000, from the original 200,000. The job gains for November, originally 100,000 jobs, were revised upward to 157,000, creating a picture of a job market that has been gathering steam.
The private sector remained the engine of growth. While federal agencies and local governments continued to lay off workers, businesses added 257,000 net new jobs in January. The biggest gains were in manufacturing, professional and business services, and leisure and hospitality.
Despite the promising numbers, various indicators create an ambiguous picture of the overall economic recovery.
Layoffs appear to be slowing as fewer people are filing claims for unemployment benefits, and factory orders have picked up.
Small businesses, though, are still not hiring much. And while sales of existing homes have started to rise, home prices continue to fall. Incomes are not growing and consumer spending is still restrained, and could come under further pressure with gas prices edging higher in recent months and as consumers revert to building up savings.
Seasonal factors may have inflated January hiring numbers in some industries, like restaurants or construction.
Steve Blitz, senior economist for ITG Investment Research, said the report nevertheless revealed strong increases in manufacturing and related job categories, like transportation and warehousing and wholesale trade. “You’ve got to give credit when things are moving in the right direction,” said Mr. Blitz, who has been cautious in heralding a recovery. “This is not a process that is going to be done in a month or two months or a year. It could take five or 10 years to get there.”
Others were unconvinced that the recent pace of job growth would be sustained, pointing to moderate consumer spending and mild economic growth, 1.7 percent last year.
“The problem is that there is this bifurcation here in the numbers,” said Bernard Baumohl, chief global economist at the Economic Outlook Group. “On the one hand we see rather impressive job growth, but on the other hand we’re also seeing other economic indicators that are telling us that the economy is fundamentally weak.”
Mr. Baumohl added, “We’re going to have to really very carefully dig deep below the surface for these and a lot of other economic statistics to find a consistency of what is happening in the U.S. economy.”
The unemployment rate appeared to be falling because people were genuinely securing jobs rather than merely leaving the work force. The Labor Department adjusted its data to account for new population estimates from the 2010 Census.
Accounting for those adjustments, the labor force had a net gain of 250,000 people in January from a month earlier. Although the pool of unemployed people has been shrinking, the number remains high — 12.8 million — about equal to the population of Pennsylvania, and long-term unemployment is one of the most crushing legacies of this recent recession. For January, the Labor Department reported that 5.5 million people had been out of work for six months or more, about 43 percent of the jobless.
And according to an analysis of December’s job numbers released this week by the Pew Fiscal Analysis Initiative, nearly a third of the jobless have been unemployed for a year or more.
Underemployment is another stubborn problem. The number of people working part time because they cannot find full-time work was 8.2 million in January. Including that group and the 1.1 million who stopped looking for work altogether, and the broader measure of unemployment was 15.1 percent.
“You have an interesting situation where you have some permanent part-time workers,” said John Silvia, chief economist at Wells Fargo. “These people are in jobs and the jobs are not likely to become full time.”
Sandy Pochapin, a 54-year-old former marketing manager, was laid off for the second time last May from a small business in Newton, Mass. Just before the start of the year she picked up a part-time job as a media consultant at an advertising agency. Her husband, a real estate lawyer, has also experienced severe cutbacks in his income.
The couple, who are now paying three times what they were paying for health care before Ms. Pochapin lost her job, have cut back on dinners out, and she said that replacing her eight-year-old Toyota Highlander was “not in the cards.” More painfully, the couple have dipped into their college-age son’s educational fund to keep up with mortgage payments and other expenses.
Ms. Pochapin, a member of several networking groups, compiles job leads and recently sent out a list with more openings than she had ever seen. “I would say things are picking up,” she said. “But where they’re picking up is not where people who have been unemployed long term have skills.” She noted many openings for jobs in mobile marketing and for digital media specialists.
Indeed, one of the perennial complaints of employers is that they cannot find qualified workers. Ancestry.com, a genealogy Web site in Provo, Utah, has openings for 150 engineers, data mining specialists and developers of mobile apps. “While we find a lot of people who are unemployed,” said Eric Shoup, a senior vice president, “they are not the people who bring the skill sets we need for our business.”
He said the company did virtually all its hiring away from other companies.
Economists are beginning to worry about the self-fulfilling nature of long-term unemployment. “It’s almost starting to look like there are two job markets,” said Cliff Waldman, the economist at the Manufacturers Alliance, a trade group. “Long-term unemployment is very sticky.”
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Related
Economix Blog: Wow. But Is the Number Real? (February 3, 2012)
http://economix.blogs.nytimes.com/2012/02/03/wow-but-is-the-number-real/
Economix Blog: Comparing Recessions and Recoveries: Job Changes (February 3, 2012)
http://economix.blogs.nytimes.com/2012/02/03/comparing-recessions-and-recoveries-job-changes-4/
Obama’s Magic Number May Be 150,000 Jobs Per Month (February 4, 2012)
http://www.nytimes.com/2012/02/04/business/economy/obamas-magic-number-may-be-150000-jobs-per-month.html
Jobless Rate Falls to 8.3%, Altering Face of Campaign (February 4, 2012)
http://www.nytimes.com/2012/02/04/us/politics/improved-job-picture-poses-risks-to-obama-and-romney.html
White House Offers Plan to Lure Jobs to America (February 3, 2012)
http://www.nytimes.com/2012/02/03/business/economy/a-lure-to-keep-jobs-made-in-america.html [the post to which this is a reply]
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© 2012 The New York Times Company
http://www.nytimes.com/2012/02/04/business/economy/us-economy-added-243000-jobs-in-january-unemployment-rate-is-8-3.html [with embedded links, graphic and video, and comments]
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Jobless rate at 3-year low as payrolls surge
Job seekers stand in line to speak with an employer at a job fair in San Francisco, November 9, 2011.
Credit: Reuters/Robert Galbraith
By Lucia Mutikani
Fri Feb 3, 2012 5:35pm EST
WASHINGTON (Reuters) - The United States created jobs at the fastest pace in nine months in January and the unemployment rate unexpectedly dropped to a near three-year low, giving a boost to President Barack Obama.
Nonfarm payrolls jumped 243,000, the Labor Department said on Friday, as factory jobs grew by the most in a year. The jobless rate fell to 8.3 percent - the lowest since February 2009 - from 8.5 percent in December.
The gain in employment was the largest since April and it far outstripped the 150,000 predicted in a Reuters poll of economists. It hinted at underlying economic strength and lessened chances of further stimulus from the Federal Reserve.
"More pistons in the economic engine have begun to fire, pointing to accelerating economic growth. One of the happiest persons reading this job report is President Obama," said Sung Won Sohn, an economics professor at California State University Channel Islands.
The payroll gains were widespread - from retail to temporary help, and from construction to manufacturing - an indication the recovery was becoming more durable.
A survey of households showed the unemployment rate declined even as new job seekers flooded into the labor force. Economists had expected the jobless rate, which has now fallen 0.8 percentage point since August, to hold steady.
"I think this is a sign that maybe the economy is reaching that holy grail of a self-sustaining economic expansion," Stuart Hoffman, chief economist at PNC Financial Services in Pittsburgh, told Reuters Insider.
The outlook was further brightened by a separate report showing service sector activity quickened last month to a near one-year high. A gauge of service sector employment touched a six-year high.
The fairly upbeat data buoyed stocks on Wall Street, with the tech-heavy Nasdaq Composite index hitting an 11-year high. The Dow Jones industrial average rose to a near four year high, while the Standard & Poor's index extended its 2012 advance to about 7 percent.
U.S. Treasury debt prices tumbled as investors dialed back expectations on Fed easing. The dollar was little changed against a basket of currencies after rising earlier in the session.
The employment report contrasted with a fairly glum assessment of the economy offered by the Fed last week.
Officials at the central bank have been debating whether to buy more bonds - a program dubbed QE3 - to drive interest rates lower. It also raised doubts about the Fed's expectation that it could hold interest rates near zero at least through late 2014.
"At the very least this scales back QE3 (quantitative easing) odds. The surprisingly persistent decline in the unemployment rate also calls into question how firmly wedded the Fed is to the late-2014 rate guidance," said Michael Feroli, an economist at JPMorgan in New York.
Interest rate futures indicated that at least some traders were beginning to lay bets the Fed could move interest rates up in early 2014.
Fed fund futures were pricing in a 38 percent chance of a January 2014 rate hike, up from 29 percent before the report, and the first better than even chance of a rate hike was in April 2014, according to CME Group, where the contracts are traded.
However, economists at most leading Wall Street firms still believe the Fed will undertake another bond-buying program, according to a Reuters poll.
DON'T MUCK IT UP
Obama welcomed the strong jobs report and urged Congress to extend a payroll tax cut and benefits for long-term unemployed, which expire at the end of this month.
"Now is not is not the time for self-inflicted wounds to our economy. I want to send a clear message for Congress. Do not slow down the recovery that we are on, don't muck it up," he said at a firehouse in Arlington, Virginia.
Republicans acknowledged the improvement in the labor market, but said the jobless rate was still too high.
"Our economy still isn't creating jobs the way it should be and that's why we need a new approach," said House Speaker John Boehner.
While employment growth has quickened there are no jobs for three out of every four unemployed people and 23.8 million Americans are either out of work or underemployed. The level of employment is still 5.57 million from its pre-recession level.
But steady progress is being made. The economy added 60,000 more jobs in November and December than previously reported.
In addition, average hourly earnings rose four cents, which should help to support spending. The report suggested that expectations of a slowdown in U.S. economic growth in the first quarter were not yet impacting on companies' hiring decisions.
Employment in the private sector surged 257,000 - the largest gain since April. Government payrolls fell 14,000, the least since September.
U.S. economic growth accelerated to a 2.8 percent annual rate in the final three months of 2011, but it was widely expected to slow as businesses ease back on efforts to rebuild inventories and exports slip amid a likely recession in Europe.
Some economists cautioned that January's jobs figures could overstate the pulse of the recovery, citing still lackluster consumer confidence, income and spending growth.
While some said the jobless rate could drop below 8 percent by year end, others warned it would likely move up in the near-term as people who had given up the search for a job re-enter the workforce.
"For this to mark an upturn in the labor market, then businesses will have to continue to hire on this scale throughout the winter," said Kathy Bostjancic, director of macroeconomic analysis at the Conference Board in New York.
CAUTIOUS OPTIMISM
The unemployment rate has now declined for five straight months, although part of the drop reflects discouraged Americans giving up the hunt for work.
A broad measure of unemployment, which includes people who want to work but have stopped looking and those working only part time but who want more work, slipped to a near three-year low of 15.1 percent in January from 15.2 percent in December.
Revisions to the payrolls figures showed 180,000 more jobs were created last year than previously believed.
Mild winter weather boosted employment last month in construction, which added 21,000 jobs after a 31,000 increase in December. Manufacturing payrolls surged 50,000, the largest gain in a year, after rising 32,000 the prior month.
Overall, the goods-producing sector added 81,000 jobs last month, the most since January 2006.
Transportation and warehousing employment increased 13,100 and courier jobs only fell 1,500. Last month, the Labor Department reported a large increase in courier jobs in December, but revisions showed they actually declined.
Retail employment rose 10,500 after gaining 6,200 in December. Temporary help services jumped 20,100 after rising 8,300, a potentially good sign for future permanent hiring.
(Reporting by Lucia Mutikani; Additional reporting by Ann Saphir in Chicago; Editing by Diane Craft)
Copyright 2012 Reuters
http://www.reuters.com/article/2012/02/03/us-usa-economy-idUSTRE7BM0AB20120203 [with comments]
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Unemployment report: January job gains have economists rethinking outlooks
[ http://www.washingtonpost.com/business/economy/us-employment-picture/2012/02/02/gIQAE9WjmQ_graphic.html ]
By Peter Whoriskey and David Nakamura, Published: February 3, 2012
An unexpectedly rosy jobs report set off a chain reaction Friday, upending economists’ gloomy predictions for the coming year, leading to a surge on Wall Street [ http://www.washingtonpost.com/business/markets/stock-futures-jump-after-us-jobs-report-shows-lower-unemployment-strong-job-growth/2012/02/03/gIQAYroimQ_story.html ] and potentially boggling the political calculus of the 2012 presidential campaigns.
The surprise — that the unemployment rate had dipped for the fifth straight month, to 8.3 percent — was first reflected in the stock market, where the Dow Jones industrial average soared to its highest mark since the beginning of the financial crisis. The tech-heavy Nasdaq, meanwhile, hit an 11-year high.
By noon, President Obama, whose reelection chances have been threatened by the nation’s economic woes, seized on the figures as proof that the recovery from the recession “is speeding up.”
“This morning we received more good news about our economy,” Obama said during an appearance at an Arlington firehouse [ http://www.washingtonpost.com/politics/obama-to-congress-dont-muck-it-up-200/2012/02/03/gIQAbwr4mQ_video.html ]. “Still, far too many Americans need a job or need a job that pays better than the one they have now. But the economy is growing stronger.”
The report forced his presidential rivals to adjust their rhetoric about the economy, which has played a leading role in the Republican debates. But they appeared ever ready to remind listeners that the unemployment rate remains elevated.
Exactly what lies ahead for the U.S. economy is far from clear. Even the more optimistic economists note that another downturn in Europe, or a spike in oil prices, or another debt showdown in Washington — or some other unexpected shock — could derail the nation’s unanticipated economic momentum.
But the Friday report depicted an economy that is gaining traction.
The number of jobs has been rising at a rate of 200,000 monthly, and those jobs are appearing in many parts of the economy, signaling a broad recovery. The growth was robust in the leisure and hospitality business, in the health-care industry and in manufacturing, which added 50,000 jobs, a higher monthly figure than at any time since 1998.
For the past few months, the stop-and-start economic recovery has shown tentative signs of unanticipated strength, and Friday’s report of another significant drop in the unemployment rate lent credibility to a bullish view, some economists said.
“This is a game changer,” Ian Shepherdson, chief U.S. economist at High Frequency Economics, said of Friday’s employment figures. “The payroll numbers validate, in the market’s eyes, what all the other data are saying.”
The nation’s economic forecasters, many of whom had predicted that the unemployment rate would remain stubbornly high this year, seemed to back off their gloomiest positions.
The Congressional Budget Office has predicted 8.9 percent unemployment for the year; the Federal Reserve has predicted between 8.2 percent and 8.5 percent for the year. Likewise, Moody’s Analytics had expected the unemployment rate to remain at 8.5 percent through the end of the year.
Moody’s Analytics, for one, is now reconsidering its predictions.“The collective psyche seems to be turning a bit more optimistic,” said Marisa Di Natale, the firm’s director of economic research. “We’re certainly going to revise our forecast.”
Startling numbers
The unemployment figures were startling enough that some analysts wondered whether they were correct. Friday’s figures from the household survey were the first to incorporate the new population numbers from the 2010 Census. But the new unemployment rate was unaffected by the change, the Labor Department said.
The nation’s economy has been central to the presidential campaign rhetoric so far, with Republican candidates chastising the Obama administration for failing to pull the country out of the recession more quickly.
Even with the new jobs figures, a central point of their attack remains unblunted [ http://www.washingtonpost.com/politics/if-recovery-strengthens-romneys-pitch-could-be-undercut/2012/02/03/gIQA3FSwnQ_story.html ]: The unemployment rate remains above 8 percent.
“Unfortunately, these numbers cannot hide the fact that President Obama’s policies have prevented a true economic recovery. We can do better,” former Massachusetts governor Mitt Romney said in a statement as he campaigned in Nevada the day before the state’s GOP caucuses.
Former House speaker Newt Gingrich, when asked on CNN whether Obama deserves any credit for the lower unemployment rate, scoffed: “Give him some credit. If it makes you happy, give him some credit.”
Obama’s campaign team, and some political scientists, believe that voters are more likely to be swayed by the direction the unemployment rate is moving — downward — rather than its exact level.
Jobs and the campaign
Lynn Vavreck, an associate professor of political science and communications at UCLA, has studied the effect of gross domestic product and the unemployment rate on presidential campaigns going as far back as 1952.
Her analysis shows that there appears to be little or no connection between an incumbent president’s vote share and the unemployment rate.
But there is a clear connection between votes for the incumbent and the direction the unemployment rate is moving.
“Is it good that the unemployment rate is dropping for Obama? Yes, it’s good,” Vavreck said. “Does it matter what it drops to? No. That’s actually pretty irrelevant.”
She said there is no particular “magic” unemployment rate that would guarantee his reelection.
“The trend since this president took office is what’s most significant,” said an Obama campaign official, speaking on the condition of anonymity to discuss strategy. “It’s the story over time as the president has taken action to address the historic economic challenges he faced when he came into office.”
On its Web site, the Obama campaign posted a chart that illustrated 23 consecutive months of private-sector job growth and encouraged supporters to e-mail it to friends “to make sure people know the good news about President Obama’s record on jobs.”
The chart included a summary of White House initiatives since Obama took office, including the Recovery Act, which provided a $787 billion stimulus; a bailout loan to the auto industry; and the payroll tax cut.
The campaign official said the chart had already become one of the campaign’s most popular social media items, having been e-mailed and posted on Facebook and Twitter hundreds of thousands of times by Friday afternoon.
Staff writers Felicia Sonmez and Philip Rucker in Washington and Paul Kane and Dan Balz in Nevada contributed to this report.
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More from The Washington Post:
U.S. adds 243K jobs in January
http://www.washingtonpost.com/business/economy/us-adds-243k-jobs-in-january-unemployment-rate-drops-to-83percent/2012/02/03/gIQAhV3mmQ_story.html
January jobs report: It's all good
http://www.washingtonpost.com/blogs/ezra-klein/post/the-january-jobs-report-its-all-good/2011/08/25/gIQAf7zkmQ_blog.html
Could the report be too pessimistic?
http://www.washingtonpost.com/blogs/ezra-klein/post/could-januarys-jobs-report-be-too-pessimistic/2012/02/03/gIQALt1pmQ_blog.html
Jobs report is good news for Obama
http://www.washingtonpost.com/blogs/the-fix/post/january-jobs-report-is-good-news-for-obama/2012/02/03/gIQA0wzkmQ_blog.html
Rubin: Drilling into the jobs data
http://www.washingtonpost.com/blogs/right-turn/post/drilling-down-on-the-new-jobs-report/2012/02/03/gIQA7KwvmQ_blog.html
*
© 2012 The Washington Post
http://www.washingtonpost.com/business/economy/us-adds-243k-jobs-in-january-unemployment-rate-drops-to-83percent/2012/02/03/gIQAhV3mmQ_story.html [with comments]
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Greensburg, KS - 5/4/07
"Eternal vigilance is the price of Liberty."
from John Philpot Curran, Speech
upon the Right of Election, 1790
F6
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