Blowout positive report on the labor market in January. Last month’s report was the best since the start of the recovery and this month’s was even better. Private payrolls were up 257,000, crushing the consensus expected gain of 160,000. Revisions for the past two months added another 66,000, and an annual “benchmark” revision added 143,000 for the year ending in March 2011 (+ 165,000 including government workers). Total hours worked were up 0.2 percent in January and were revised up 0.5 percent for December.
The jobless rate dropped to 8.3 percent, down from 9.1 percent a year ago. Moreover, the drop happened despite an increase in the labor force of 249,000, which more than outweighed the losses of 167,000 in November/December. The labor force is now up 907,000 from a year ago. As you can imagine, seeing this data tempts us to take a victory lap; our forecast of nonfarm payroll gains of 180,000 per month this year may now be too low.
However, today’s numbers have to be taken with a grain of salt. This winter’s weather has been unusually mild. The household survey shows typical weather-related job losses for January are 430,000, but weather only prevented 206,000 people from working this January, for a net gain of 224,000. These numbers do not match up exactly with the payroll survey — someone who can’t get to work but is still paid is counted in the payroll survey — but they do suggest some downside risk to next month’s report.
The bottom line for monetary policy is that a third round of quantitative easing, which we always believed was very unlikely, now looks even less so. The bottom line for the economy is that consumer purchasing power keeps growing. Hours worked in the private sector are up 2.7 percent in the past year, while average hourly earnings are up 1.9 percent. This translates into a 4.6 percent gain in cash earnings (excluding fringe benefits, like health insurance), which is more than enough to outpace inflation. The “growth deniers” need to develop a new narrative.
What are you talking about, Bob? Have you not read "ZeroHedge"? Drudge? This was a TERRIBLE jobs report......
Just kidding. Agree with your post.
Reply to this commentLinkReport AbuseWhat is going on in the corner today? -1.2 million from the labor force. If your analysis doesn't include this fact you shouldn't be writing on this site.
Reply to this commentLinkReport AbuseLook at the article history, it's rose colored glasses ad nauseam.
Reply to this commentLinkReport AbuseYou are repeating a false headline.
Every January the BLS adjusts its estimate of the US civilian non-institutionalized population. The population was adjusted upward by 1.7 million. A large change but not out of line with some large moves in prior years.
Of that 1.7 million, the labor force expanded by 500K and those not in the labor force expanded by 1.2 million. Again, I repeat, the labor force went up. And it would have gone up by 249,000 even in the absence of the new population estimates.
Please do not repeat false headlines about data that both you and the headline writers are not familiar.
Reply to this commentLinkReport AbuseThank you, Mr. Stein, for that cogent explanation.
I find it to be rather pathetic that people are more invested in getting rid of Obama than celebrating a solid 4 months of positive job growth. The GOP brand might be a little better received these days if people would act a little more positive.
Reply to this commentLinkReport Abuseum, who are you and who let you on the corner? how could you keep a straight face when the CBO predicted a 1.0% GDP for 2013?
Reply to this commentLinkReport AbuseI used to visit The Corner to see how news and politics shoud be analyzed by examining the truth from a conservative perspective.
Lately, I've been seeing a lot more garbage like this. It makes me wonder whether NRO has changed, or whether I'm just finally recognizing garbage that has been here all along.
Reply to this commentLinkReport AbuseSince when did it become "conservative" to analyze the US economy only from a doom-and-gloom perspective?
Reply to this commentLinkReport AbuseYep, I too am disappointed in The Corner for many reasons, one being the overkill posting on the elections and barely any coverage of other news items...watch the other hand. Anyway, if you don't read legal insurrection, hop over there for a read, it's a daily stop for me.
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How about The Corner reporting on Beb Bernake's visit to Congress...he made a comment, non-discretionary spending / GDP is within historical trends, he said the elephant in the room is healthcare costs and referred to the CBO report. The media fails to report this as do the GOP candidates...instead, let's cheerlead a labor report which is based on a huge drop in the labor force.
Reply to this commentLinkReport AbuseWhooooa! Hold on there! The BLS removed 1.2 million people from the workforce this month... to get to that 8.3% number.
Does that sound like the economy has "crushed" the forecast jobs gain?
There is friggin' in the riggin'.
Reply to this commentLinkReport AbuseI'm confused about labor force participation. This claims we lost 1.2 million in one month. How does that fit in here?
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Thanks,
Todd Lemmon
Reply to this commentLinkReport AbuseThe reduction in the labor force equates to a lowering of the unemployment ratio (or rate). The BLS used to publish a more accurate rate, but stopped doing so for obvious reasons. That is why one cannot compare today's unemployment rate to that of, say, 1982. If you did, you would be comparing apples to organges. Ditto for the CPI
Reply to this commentLinkReport AbuseGrains of salt aside, the GOP should be claiming some credit here. Before the House takeover, America faced a relentless assembly-line of bad legislation, bad regulation, and insane spending.
The GOP hasn't been able to reverse any of that -- but it did successfully jam some spokes into the wheels. Improvement should not only be welcomed, it should be expected. Gridlock, my friends, is good.
Imagine the progress we would have if we could actually reverse some of that Progressivism instead of merely slowing it.
Reply to this commentLinkReport AbuseThe GOP has been Hooverizing the recovery, not aiding it. The budget cuts at the non-Federal level have been a huge DRAG on growth, not a stimulant.
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Reply to this commentLinkReport AbuseHoover? The vacuum cleaner or the big-spender? Go re-read history. Or better yet, look around: government spending saps the value-producing economy, it does not prop it up.
Spending has gone up every year but here come the rubes talking about "budget cuts." All we've done is tame the rate of growth. Barely. That helps but a much stronger course correction is still needed.
Unbelievable. These people see a hurting economy and all they can envision are grander and grander plans to misallocate other people's resources.
Reply to this commentLinkReport AbuseSomebody hasn't ever heard of the Broken Window Fallacy: External Link
Reply to this commentLinkReport AbuseOh, here we go again. I'll just copy/paste from my post in the other fluffer piece below.
The spin coming off this site would be enough to qualify for Green Energy if it was powering a turbine.
Labor force participation at 30 year low: External Link
Implied Unemployment Rate peaking: External Link
Job growth according to the NFP report was largely in low-wage jobs: External Link
Home Run? And let's not even go into the inventory stuffing going on at American car dealerships, lol. What a joke. The whole economy is a smoke screen and the numbers being reported by those behind the curtain are propaganda, at best.
Reply to this commentLinkReport AbuseFrom what I understand, over 1.1 million people left the "job force" last month (ie are no longer being counted). This would have a positive effect on the raw unemployment number (which it did). It is great that a few hundred thousand new job slots were opened. But, putting this in persepctive: to keep this recovery going, the federal government continues to run historic defecits (Bernecke was correct in highlighting point this week), and the Fed's insistence on 0% interest rates. One wonders what would happen if the government does enact austerity measures, and the Fed increases interest rates.
Reply to this commentLinkReport AbuseYeah, the other thing about that bit?
Those 1.1 million people? They're not paying taxes any longer either. That's gotta be good for the deficit, right?
(That's the bit that the "Not In Labor Force" Deniers forget about...)
Reply to this commentLinkReport AbuseOh no, not again.
This "report" (much like everything until Nov. 2012 is going to be) is deliberately fraudulent.
Do the comparisons the correct way (annualized) so that the "seasonal" stuff gets removed properly, and this is the SECOND-WORST report since 99...
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@JefferyEdelman:
Reply to this commentLinkReport AbuseSnarking at Drudge is fine. Throwing any snark ZHs way just shows an intentional ignorance of the world around you. ZH is one of the very few places on the net to get unbiased "financial truths". (Not counting the other contributors, just the main blog)