Friday, January 08, 2010
The Labor Department reported that the unemployment rate held steady at 10.0 percent in December and nonfarm payrolls declined by 85,000, much worse than analysts' estimates. But, there was good news in that the November payrolls data was revised up from -11,000 to +4,000, the first month of net job gains since the recession began in late-2007.
It doesn't look like much in the chart, but anything with a '+' sign in front of it is good news. Since the November job loss total will be updated again next month and then subjected to more changes next year as part of the annual benchmark revisions, not too much should be made of the gain, however, recent jobs data is a dramatic improvement from early in 2009.
Overall, revisions to data for prior months were slightly negative, the October payrolls adjusted from -111,000 to -127,000, in a break from the recent trend where previous data had been revised upward regularly.
This dampens some of the optimism that has been generated in recent weeks as weekly claims for unemployment insurance have steadily declined.
By category, the story remained the same as in recent months - the construction, trade, and manufacturing sectors all lost jobs while the professional and business services group along with education and health care services posted gains.
A total of 55,700 temporary jobs were added, a good sign for the economy that employers continue to add temporary help as business picks up. But, a decline of some 15,200 jobs at food services and drinking places and an overall decline of 25,000 in the broader leisure and hospitality category is an indication that consumers are still hesitant to spend money.
As for the unemployment rate, a sharp drop in the labor force kept the official jobless rate from rising in December, a better indication of the unemployment picture being provided by the broader U6 underemployment measure (including discouraged workers and part-time workers who would rather have full-time jobs) that rose from 17.2 percent to 17.3 percent, just below the all-time high reached in October.
Overall, this has to be considered something of a setback given all the optimism about an improving labor market since the report of a month ago.