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Where Are the Jobs?

February 4, 2011 – 6:04 pm

The official jobs report was very disappointing this morning with only adding 36,000 new employees for January. The unemployment rate fell to 9.0% from 9.4%. Those two pieces of data do not seem to match. We need 50,000 new jobs every month just to absorb new workers so how can the rate fall with only 36,000 new jobs? It is in how they count. The government when it counts new jobs goes to private industries and the public sector and asks if they had any new hires. That is how they get the actual number of 36,000. However, to determine workers entering or leaving the work force they conduct what is called a household survey asking if the adults in the home are working. When asked there were 600,000 people entering the work force or dropping out of the work force and not counted as unemployed. You can see how convoluted that can be.

The excuse for this lack of new jobs appeared to be centered on weather and maybe we can understand a lack of some jobs because of the snow storms that have been in the news for most of January. We will see if that is true in next month’s report.

For clarity there was a big jump in manufacturing jobs. That is a good sign but no matter how you spin it this was not a good report and for the economy to continue to gain strength we need more jobs.

Good Trading
Steve Peasley

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