Global| Mar 04 2011U.S. Payroll Employment Firms And Unemployment Rate Falls Unexpectedly
by:Tom Moeller
|in:Economy in Brief
Summary
Weather effects faded last month and the U.S. job market showed clear signs of improvement. Nonfarm payrolls increased 192,000 and added to a 63,000 increase during January, initially reported as 36,000. The December figure also was [...]
Weather effects faded last month and the U.S. job market showed clear signs of improvement. Nonfarm payrolls increased 192,000 and added to a 63,000 increase during January, initially reported as 36,000. The December figure also was revised up to 152,000 from 121,000. The latest gain slightly beat expectations for a 175,000 increase. An additional sign of improvement was the unemployment rate which fell to 8.9%. That was the lowest level since since April 2009 and compared to expectations for a rise to 9.1%
From the establishment jobs survey, the 192,000 showed the passage of
winter weather's effect as construction jobs rose 33,000 and more-than-reversed
a lessened 22,000 January decline. Factory sector jobs increased 33,000. Private
service sector employment rose 152,000 led by a 47,000 increase in professional
& business services (2.7% y/y) and a 40,000 increase (2.2% y/y) in education
and health. Government jobs fell 14,000 (-1.1% y/y). Temporary help services
jobs recovered 15,500 (12.2% y/y after a modest January decline. Budget
shortfalls continued to force job cutbacks with local gov't employment payrolls
off 18,000 (-1.6% y/y) and state payrolls off 12,000 (-0.3% y/y).
The household survey indicated a decline in the unemployment rate to 8.9%, the third successive monthly decline and it compared to the high of 10.1% in October 2009. The overall unemployment rate, including those involuntarily working part-time, fell to 15.9%. Employment increased 250,000 (0.6% y/y) while the civilian labor force rose 60,000 (-0.2% y/y) after a whopping 504,000 January decline. The labor force participation rate remained at its recent low of 64.2% versus its high of 67.1% roughly ten years ago. The average duration of unemployment rose to a record 37.1 weeks but the number of those unemployed for more than 27 weeks slipped 2.3% y/y.
The private sector workweek remained stable m/m at 34.2 hours and equal to the Q4 and Q3 averages. So far this quarter the index of aggregate hours worked (employment times hours) is up 0.9% (AR) from Q4'10.
The diffusion index of private sector employment, which measures the breadth of job increase, rose to 68.2%, the highest since January 1998. The factory sector index slipped to 64.2% from its January high of 73.5%.
Average hourly earnings were unchanged last month (2.1% y/y) after a 0.5% January increase. A 0.2% increase had been expected. The 0.2% gain (2.3% y/y) in the goods producing sector was offset by a 0.1% slip (+2.0% y/y) in services.
The figures referenced above are available in Haver's USECON database. Additional detail can be found in the LABOR and in the EMPL databases. The expectation figures are from Action Economics and are in the AS1REPNA database.
How did unemployment insurance extensions affect the unemployment rate in 2008-10? from the Federal Reserve Bank of Chicago can be found here.
| Employment: (M/M Chg., 000s) | Feb | Jan | Dec | Y/Y | 2010 | 2009 | 2008 |
|---|---|---|---|---|---|---|---|
| Payroll Employment | 192 | 63 | 152 | 1.0% | -0.7% | -4.4% | -0.6% |
| Previous | -- | 36 | 121 | -- | -0.5% | -4.3% | -0.6% |
| Manufacturing | 33 | 53 | 11 | 1.6% | -2.7% | -11.6% | -3.4% |
| Construction | 33 | -22 | -6 | -0.4% | -8.1% | -16.0% | -6.1% |
| Private Service Producing | 152 | 33 | 163 | 1.4% | -0.1% | -3.5% | -0.2% |
| Government | -30 | -5 | -15 | -1.1% | -0.3% | 0.3% | 1.3% |
| Average Weekly Hours | 34.2 | 34.2 | 34.2 | 34.0 (Feb.'10) |
34.2 | 33.9 | 34.5 |
| Average Hourly Earnings | 0.0% | 0.5% | -0.1% | 2.1% | 2.4% | 3.0% | 3.8% |
| Unemployment Rate (%) | 8.9 | 9.0 | 9.4 | 9.7 (Feb.'10) |
9.6 | 9.3 | 5.8 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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