Recent Updates

  • Malaysia: CPI (Feb); Macao: CPI (Feb); Thailand: International
  • Macao: Public Finance (Jan)
  • US: International Transactions (Q4)
  • France: Imported Raw Materials Prices (Feb), Producer Cost Indices for Construction (Dec)
  • UK: Average Weekly Hours of Work, Labor Market (Dec), Claims, HM Revenue & Customs Receipts, Public Sector Finance (Feb), Earnings (Jan), CBI Industrial Trends Survey (Mar)
  • Turkey: House Sales (Feb); Israel: Revenue Indexes (Jan);
  • more updates...

Economy in Brief

U.S. Payroll Increase Disappoints Again But Unemployment Rate Declines
by Tom Moeller  January 07, 2011

The labor market just can't seem to generate a full head of steam. Nonfarm payrolls rose 103,000 last month after upwardly revised gains during the prior two months. But the rise disappointed Consensus forecasts for a 150,000 gain and it left three-month growth in private payrolls at 1.4% (AR), about where it's been since April. On the positive side of the report was the decline in the unemployment rate to 9.4% versus expectations for 9.7%. Also positive was that 60% of industries added to payrolls, nearly the highest since the Spring.

The 9.4% unemployment rate is derived from the household survey. (Earlier months' figures reflect benchmark revisions.) The hefty drop from 9.8% reflected a 297,000 increase (+0.9% y/y) in employment following two months of decline. The labor force fell 260,000 (0.3% y/y) for the third consecutive monthly decline. These drops may reflect the end of the Census. The more comprehensive unemployment rate, which includes marginally attached workers and those who work part time but would prefer a full-time job, fell to 16.7%.

Also from the household survey, the average duration of unemployment rose slightly to 34.2 weeks but remained below its June high of 34.8. Of those unemployed, 44.3% were out of work for 27 weeks or longer. The poor job market caused the labor force participation rate to drop to 64.3%, its lowest since 1984. By educational attainment, the unemployment rate ranged from 15.3% for persons without a high school diploma to 4.8% for those with a college degree or higher.

From the establishment jobs survey, only the private service sector was strong due to gains in education (2.6% y/y), health care (1.9% y/y), leisure & hospitality (1.8% y/y) and retail (0.8% y/y). Factory sector jobs rose moderately (1.2% y/y) but construction (-1.6% y/y) and government jobs fell. Within public sector employment, local jobs were the weakest posting a 20,000 worker decline (-1.8% y/y), while state government jobs were unchanged (0.1% y/y). Federal government hiring rose 10,000 (1.0% y/y).

The length of the average workweek in the private sector was unchanged at 34.3 hours though that was up from the 2009 low of 33.7. The improvement has been notable in the factory and construction industries. Aggregate hours worked (employment times hours) rose 0.1% last month and 2.3% (AR) for the quarter.

Average hourly earnings again rose just 0.1%, an increase which dropped the y/y gain to a near-record low 1.9%. Wages in the construction sector have been the strongest (2.6% y/y) followed by private services (1.9% y/y) and manufacturing (1.5% y/y).

The figures referenced above are available in Haver's USECON database. Additional detail can be found in the LABOR and in the EMPL databases.

Economic Effects of the Unemployment Insurance Benefit from the Federal Reserve Bank of Philadelphia is available here.

The Economic Outlook and Monetary and Fiscal Policy is today's testimony by Fed Chairman Ben S. Bernanke and it can be found here.

Employment: 000s Dec. Nov. Oct. Y/Y 2010 2009 2008
Payroll Employment 103 71 210 0.9% -0.5% -4.3% -0.6%
     Previous -- 39 172 -- -- -- --
  Manufacturing 10 -8 -4 1.2% -2.0 -11.3% -3.4%
  Construction -16 -2 4 -1.6% -7.0 -15.7% -6.1%
  Private Service Producing 115 84 183 1.4% 0.1 -3.4% -0.2%
  Government -10 -8 17 -1.0% -0.3 0.2% 1.3%
Average Weekly Hours 34.3 34.3 34.3 33.8
34.2 33.1 33.6
Average Hourly Earnings 0.1% 0.1% 0.4% 1.9% 2.2% 3.0% 3.8%
Unemployment Rate (%) 9.4 9.8 9.7 9.9
9.6 9.3 5.8
large image