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Unemployment Report: February 5, 2010

Posted by Larry Doyle on February 5, 2010 8:58 AM |

The widely anticipated February Unemployment Report covering the month of January was just released. Let’s dive right in and take a look at the numbers . . .

I. UNEMPLOYMENT RATE
August: 9.4%
September: 9.7%
October: 9.8%
November: 10.2%…revised to 10.1%
December: 10%
January: 10%
– February Consensus Expectation: 10.1%
– February Actual: 9.7%

>> LD’s comments: A fluke. A drop in the rate would typically be viewed as a positive, but then why didn’t we see job growth? Today’s report indicates that a lot of people have given up looking for work, thus shrinking the overall labor pool.  The U-6 (the underemployment rate) is now 16.5%. Better? Don’t be fooled. I think it is again more an indication that people are exiting the labor force overall.

II. NON-FARM PAYROLL (click here for definition of this term)
July: loss of 463k
August: loss of 304k
September: loss of 154k
October: loss of 139k
November: loss of 111k…revised to a loss of 127k jobs
December: loss of 11k…further revised to a gain of 64k
January: loss of 85k…revised to a loss of 150k
February Consensus Expectation: 0, that is no job gain or loss
– February Actual: a loss of 20k jobs.

>> LD’s comments: weaker than it appears as a lot of jobs added were temporary workers and Census workers. Revisions from prior two months was a net loss of 5k jobs.

III. AVERAGE HOURLY EARNINGS
August: .3%
September: .4%
October: .1%
November: .3%
December: .1%
January: .2%
February Consensus Expectation: .2
– February Actual: .2%

>>LD’s comments: as expected.

IV. AVERAGE HOURLY WORKWEEK
July: 33.0 hours
August: 33.1 hours
September: 33.1 hours
October: 33.0 hours
November: 33.0 hours
December: 33.2 hours
January: 33.2 hours
– February Consensus Expectation: 33.2 hours
– February Actual: 33.9 hours…edited to 33.3 hours..High five to Meteor Blades (see comment below, for clarification)

>> LD’s comments: this number surprises me. Are we truly seeing the increased demand drive the hours worked this much higher? Overall, this is a positive in the midst of otherwise mixed to negative news. …Edit: Meteor Blades provides further sense on cents on this data. Thanks!!

V. FURTHER COLOR: the major piece of news within our employment situation was actually hinted at a few days ago and that is that the Department of Labor revised overall employment for 2009 down by 930k jobs. Were they looking through rose-colored glasses all along? Who knows? This revision is an indication our recession was even deeper than believed or, in my opinion, reported.

The cheerleaders will run out onto the field and smile for the camera, but don’t be fooled. The labor pool has shrunk and that explains the drop in the rate.

Where are the real jobs? Where is the growth? We’re still looking and waiting.

VI. MARKET REACTION

Pre (8:25am) and Post-report (8:50am)

2yr Tsy: .80 and .80…ho hum…
10yr Tsy: 3.59% and 3.62%…ho hum…
DJIA Futures: -58 points and -7 points…slightly better
S&P 500 Futures: -6.7 and -2.2…
U.S. Dollar Index: 80.19 and 80.04…slight downtick…

Questions, comments, constructive criticisms always encouraged and appreciated.

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LD

  • Mike

    LD,

    As far as the increased hourly workweek, I think that is what you get when companies are trying to do more with less people.

    Goes along with the theme of a much smaller labor pool. There just aren’t enough jobs for everyone. Companies are gonna give their fewer employees more hours to save on insurance and what not.

    9.7%…gimme a break.

    Assuming the people who have ‘given up’ still WANT work, we’re probably looking at 18 – 19% actual unemployment.

  • divvytrader

    non-seasonal adjusted U-6 @ new record high of 18% …. if you believe the BLS and CNBC , there are simply millions of Americans giving up working ever again …..must all be packing their hobo bags getting ready to move out of the house to that cosy little spot under a nearby bridge and learning to love Boones Farm .

    • LD

      Great color on the U-6. Thanks for adding.

  • I agree. I think it’s a fluke, or rather a quirk of how BLS now controls for population. So, will the fluke/quirk continue next month?

    On No. IV, you’ve conflated two different measures, which is the source of your surprise. All the previous numbers you cite are for average hours worked for production and nonsupervisory employees. This is not the same as the average hourly workweek that you cite for today’s report.

    The PNE number rose by 0.1 hour to 33.3 hours, completely in keeping with what was expected.






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