The headlines are that the rate itself dropped .4 percent. On the surface that seems good. But only 36,000 jobs were created, 720 per state. Ouch. We need 1.3 million in California alone to get back where we were.
However, the good news in the report is based on some 500,000 individuals who either found work or fled the labor force, or were statistically manipulated.
Legal Insurrection believes it is new accounting:
ZeroHedge says the “labor participation” rate has fallen to a 26-year low. That means fewer people are even in the job market.
But then, there is the mainstream view:
Which, despite the headline, isn’t so good either.
“The unemployment rate has fallen by eight-tenths of a percentage point in the past two months. That’s the steepest two-month drop in nearly 53 years.
But part of that drop has occurred as many of those out of work gave up on their job searches. When unemployed people stop looking for jobs, the government no longer counts them as unemployed.
The number of people who have given up looking rose to 2.8 million last month, from 2.6 million in December.
And the participation rate, which is the percentage of the working-age population working or looking for work, fell to a 26-year low of 64.2 percent.”
How the unemployment rate falls .8 percent in two months yet job creation is one-quarter of what is needed is a mystery unless, indeed 500,00o people were in fact dropped from the count. But a partial answer may be here:
“The January jobs report also includes the government’s annual revisions to the employment data, which showed that fewer jobs were created in 2010 than previously thought. All told, about 950,000 net new jobs were added last year, down from a previous estimate of 1.1 million. The economy lost about 8 million jobs in 2008 and 2009.
In the past three months, the economy generated an average of 83,000 net jobs per month. That’s not enough to keep up with population growth.
The weakness in the government payroll survey was widespread. Restaurants and hotels cut 2,200 jobs. Governments shed 14,000 positions. And temporary help agencies eliminated 11,000 jobs. Financial services lost 10,000 positions.”
In other words, the report is a snapshot and is revised later, the revisions have mostly been downward. So we have a “good news” headline and a below-the-fold fact: People have given up looking and 500,000 people might have been dropped from the rolls due to a change in census accounting.
The other question, for another day, is how do we pay for the government when less than 2/3’s of the labor force is working or even looking?