63,000 JOBS LOST IN FEBRUARY

The February jobs report showed that 63,000 jobs were cut in February, yet the unemployment report showed that the unemployment report improved from 4.9% to 4.8%. How? Because the unemployment report does not count anyone who quits looking for work and a good many people who are unemployed have quit looking in this difficult job market.

From USA Today:

Employers cut jobs for a second month in February while the unemployment rate fell as more people quit looking for work in the weakening job market, the government said Friday in a report that led to further calls of a 2008 recession.

From The New York Times:

The worst fears of consumers, investors and Washington officials were confirmed on Friday, as deepening paralysis on Wall Street collided with stark new evidence of falling employment and a likely recession.

In a report that was far worse than most analysts had expected, the Labor Department estimated that the nation lost 63,000 jobs in February. It was the second consecutive monthly decline, and the third straight drop for private-sector jobs.

Though monthly payroll data are notoriously volatile and subject to revision, the jobs report was so bleak that many of the few remaining optimists on Wall Street threw in the towel and conceded that the United States was already in a recession.

JOBLESS CLAIMS 4-WEEK AVERAGE WORST SINCE HURRICANE KATRINA

While many "news" organizations will no doubt be blasting the headline "JOBLESS CLAIMS FALL", responsible ones will be leading with "4-WEEK JOBLESS CLAIMS AVERAGE WORST SINCE HURRICANE KATRINA SPIKE".

From USA Today:

The Labor Department reported Thursday that the number of new jobless claims dropped by 9,000 last week to a total of 349,000, but analysts noted that claims offices in California were open for only four days last week because of a state holiday.

The four-week average for claims, which gives a better picture of labor market trends, rose to 360,500. That was the highest level since claims spiked in October 2005 in the aftermath of Hurricane Katrina.

Analysts said the rise in the four-week average was depicting a labor market that is coming under increasing strains because of the slowing economy.

The economy shed 17,000 jobs in January, the first monthly job loss in more than four years. Analysts believe that the unemployment rate, which currently stands at 4.9%, will rise to 6% before the current slowdown has run its course.

PRODUCTIVITY INCREASES IN Q4

On Wednesday the Labor Department reported that productivity increased at an annualized rate of 1.8% for the fourth quarter. That compares unfavorably with the 6% gain in productivity in the third quarter, but was better than most economists had predicted and was in line with the 1.6% productivity gain for all of 2007.

From The New York Times:

Ian Shepherdson, chief U.S. economist at at High Frequency Economics, said he looked for productivity to slow further in 2008, reflecting an extremely weak economy in the first half of the year.

For the year, productivity rose by 1.6 percent, a slight rebound from a 1 percent gain in 2006 but both years were well below the average annual increases of 3.2 percent turned in from 2000 through 2004.

Productivity determines whether living standards can rise because it allows businesses to pay their workers more because of their increased output without having to raise the cost of their products, which increases inflation.

The country went through a two-decade period of stagnant increases in productivity following the oil shocks of the early 1970s. However, starting in 1995, productivity began showing bigger improvements, reflecting all of the investments that had been made in computers and other efficiency-enhancing equipment.

Economists are currently debating whether that substantial gain in productivity is now waning or whether the slowdown is just a temporary reflection of the deterioration of the overall economy.

MIXED EMPLOYMENT REPORT ISSUED

From The New York Times:

Two distinctly different views of the economy emerged today in a single report: the crucial employment survey issued by the Labor Department.

The economy added 166,000 jobs in October, the fastest pace in five months, according to employers. Payrolls grew at a pace more than twice what analysts had predicted, led by a sharp increase in the service sector.

But a survey of consumers showed that fewer Americans were employed last month over all. The labor force shrank by 211,000 jobs, and 465,000 Americans said they were no longer working.

The mixed employment report underscores the uncertainty on Wall Street, as analysts insist the fourth quarter will include a broad slowdown in growth and spending even as some recent reports suggest a sunnier outlook.

“You’ve got what’s good and what’s scary about this economy in this one report,” said Jared Bernstein, an economist at the Economic Policy Institute.

The estimate of job growth, which beat even the highest estimates, follows a downwardly revised 96,000 gain in September and a 93,000 gain in August, the Labor Department said. Still, payrolls are increasing at the slowest annual rate since June 2004.

The unemployment rate held steady at 4.7 percent in October, the highest rate since August 2006, but only because the survey found that more people stopped looking for work and were therefore not counted by the government as unemployed.

Manufacturing and retail jobs dropped sharply in October, underscoring analysts’ expectations that consumer spending and business activity will slow in the fourth quarter as problems in the housing market affect the broader economy.

Wages ticked up 0.2 percent, to $17.58, slightly below expectations, and are up 3.8 percent compared with those a year earlier. The length of the average workweek stayed flat at 33.8 hours.

Adding to the uncertainty about the report, most of the job gain — 103,000 of the 166,000 net new jobs — came from an estimate that the Labor Department makes each month about how many jobs were added by new businesses. The Labor Department did not actually find evidence of these jobs; it assumed they were created based on historical patterns.

SEPTEMBER JOBS REPORT MODESTLY POSITIVE DESPITE SMALL UNEMPLOYMENT RATE INCREASE

You can view the official release at the Bureau of Labor Statistics.

From USA Today:

Employers added 110,000 workers in September, fastest rate in four months, but the unemployment rate ticked up to the highest level in more than a year as companies didn't add enough jobs to absorb a steady stream of people coming into the labor force.

The numbers suggest that the job market, although it has lost some steam, is still relatively healthy.

"Slowdown in place — but no collapse nor recession," Wachovia chief economist John Silvia said in a note to clients.

The seasonally adjusted 110,000 workers that companies and the government added in September was the biggest increase since May, the Labor Department said. And in a big reversal, the department revised its estimate of job creation in August to a positive 89,000 after saying last month that employers cut workers for the first time in four years.

But despite the payroll gains, the unemployment rate rose to 4.7% in September from 4.6% in August, to the highest rate since August 2006. The increase came as the number of people entering the labor force jumped in September after dropping in August. While most of those people were hired, not everyone was able to find work.

JANUARY UNEMPLOYMENT RISES TO 4.6%

The Department of Labor released the January 2007 unemployment data today showing that unemployment rose from 4.5% in December to 4.6%. Some highlights of the report:

• 111,000 net new jobs were added to non-farm payrolls, 104,000 of those in the service sector.
• 16,000 factory jobs were lost in January, the seventh straight monthly decline.
• 22,000 construction jobs were added in January.
• Average hourly earnings rose 0.2% to $17.09 per hour.
• Over the past year, hourly and weekly earnings have risen 4%.
• The unemployment rate for Hispanics rose to 5.7% from 4.9% in December.
• The unemployment rate for African Americans dropped to 8% from 8.4%.
• The unemployment rate for whites rose to 4.1% from 4%.

USA Today
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