Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
Silver Outlook Is 'Excellent' - 23rd July 19
Why The Coming Silver Rally Might Be The Greatest - 23rd July 19
We Are in for Decades of Ultra-Loose Monetary Policy - 23rd July 19
Gold & Gold GDX Stocks Ripping. What’s Next? - 23rd July 19
Stock Market Breadth Warning Signs for the Stock Market’s Rally? - 23rd July 19
U.S. Recession Watch: The Six-Cycle Forecast - 23rd July 19
US Dollar Index tightly wound between: US Bond Yields down on safety flows - 23rd July 19
Stocks Bull or Bear? The Market’s Message - 23rd July 19
This Dividend Aristocrat Is Leading the 5G Revolution - 22nd July 19
What the World Doesn’t Need Now is Lower Interest Rates - 22nd July 19
My Biggest 'Fear' For Silver - 22nd July 19
Reasons to Buy Pre-Owned Luxury Car from a Certified Dealer - 22nd July 19
Stock Market Increasing Technical Weakness - 22nd July 19
What Could The Next Gold Rally Look Like? - 22nd July 19
Stock Markets Setting Up For A Volatility Explosion – Are You Ready? - 22nd July 19
Anatomy of an Impulse Move in Gold and Silver Precious Metals - 22nd July 19
What you Really need to Know about the Stock Market - 22nd July 19
Has Next UK Financial Crisis Just Started? Bank Accounts Being Frozen - 21st July 19
Silver to Continue Lagging Gold, Will Struggle to Overcome $17 - 21st July 19
What’s With all the Weird Weather?  - 21st July 19
Halifax Stopping Customers Withdrawing Funds Online - UK Brexit Banking Crisis Starting? - 21st July 19
US House Prices Trend Forecast 2019 to 2021 - 20th July 19
MICROSOFT Cortana, Azure AI Platform Machine Intelligence Stock Investing Video - 20th July 19
Africa Rising – Population Explosion, Geopolitical and Economic Consquences - 20th July 19
Gold Mining Stocks Q2’19 Results Analysis - 20th July 19
This Is Your Last Chance to Dump Netflix Stock - 19th July 19
Gold and US Stock Mid Term Election and Decade Cycles - 19th July 19
Precious Metals Big Picture, as Silver Gets on its Horse - 19th July 19
This Technology Everyone Laughed Off Is Quietly Changing the World - 19th July 19
Green Tech Stocks To Watch - 19th July 19
Double Top In Transportation and Metals Breakout Are Key Stock Market Topping Signals - 18th July 19
AI Machine Learning PC Custom Build Specs for £2,500 - Scan Computers 3SX - 18th July 19
The Best “Pick-and-Shovel” Play for the Online Grocery Boom - 18th July 19
Is the Stock Market Rally Floating on Thin Air? - 18th July 19
Biotech Stocks With Near Term Catalysts - 18th July 19
SPX Consolidating, GBP and CAD Could be in Focus - 18th July 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

U.S. January Employment Situation Shows Widespread Improvement, but Short of Full Employment Mandate

Economics / Employment Feb 04, 2012 - 09:14 AM GMT

By: Capital3X

Economics

Diamond Rated - Best Financial Markets Analysis ArticleCivilian Unemployment Rate: 8.3% in January, down from 8.5% in December. Cycle high jobless rate for the recent recession is 10.0% registered in October 2009.

Payroll Employment: +243,000 jobs in January vs. +203,000 in December. Private sector jobs increased 257,000 after a gain of 220,000 in December. A net gain of 60,000 jobs followed after revisions to payroll estimates of November and December


Private Sector Hourly Earnings: $23.24 in January vs. $23.20 in December; 1.9% y-o-y increase in January vs. 2.1% gain in December.

Household Survey - The unemployment rate fell to 8.3% in January from 8.5% in the prior month. The current level of the jobless rate is the lowest in three years. The unemployment rate recorded meaningful declines across all major categories of the labor force - white adult men (7.7% vs. 8.0% in December), white adult women (7.7% vs. 7.9% in December), African Americans (13.6% vs. 15.8% in December), less than high school diploma (13.1% vs. 13.8% in December), some college or associated degree (7.2% vs. 7.7% in December).

The expansion of the labor force (+508,000) in January after two months of declines was expected, while the increase in employment (+847,000) was an upside surprise. The number of people who were unable to get work in January because of inclement weather was smaller (206,000) than typical (see Chart 2). Therefore, warm weather lent a small helping hand to raise employment, but the total gain still stands out.

Establishment Survey - Total payroll employment increased 243,000 in January, putting the total number of jobs created since the trough of the Great Recession at 1.906 million. On average, 201,000 jobs have been created in the past three months.

Highlights of changes in payrolls during January 2012:

Construction: +21,000 vs. +31,000 in December

Manufacturing: +50,000 vs. +32,000 in December

Private sector service employment: +257,000 vs. +220,000 in December

Retail employment: +11,000 vs. +6,000 in December

Professional and business services: +70,000 vs. +63,000 in December

Temporary help: +20,100 vs. +8,300 in December

Financial activities: -5,000 vs. +4,000 in December

Health care: +30,900 vs. +17,600 in December

Government: -14,000 vs. -17,000 in December

An index chart sets the level of employment at the trough equal to 100 in order to assess the extent of improvement in employment after an economic recovery/expansion. Charts 4 and 5 are index charts, where a reading of 102 implies that hiring has risen 2.0% from the trough, while 95% would mean it has fallen by 5.0%. The gain in manufacturing jobs has raised the number of jobs in this sector past the low seen at the trough but the increase in employment in the construction sector is small and still significantly below the level seen at the trough of the Great Recession. At the same time, the good news that the number of jobs in the construction sector appears to have bottomed out (see Chart 4).

Applying the same methodology to the entire private and public sectors, private employment has risen 2.3% from the trough and government employment continues to decline (see Chart 5). Government employment is 2.65% below the level seen in June 2009.

The number of industries hiring in the overall private sector (64.1%) and the factory sector (69.1%) was widespread in January such that it compares with levels seen in the expansion phase of the prior business cycle.

The 1.6% jump in the manufacturing man-hours index augurs positively for a strong jump in industrial production during January. The 0.2% gain in hourly earnings combined with the increase in payrolls should yield a noticeable increase in personal income during January, which has been languishing for several months. The year-to-year change in hourly earnings (+1.9%) continues to place the Fed in a favorable position if and when it considers a third round of quantitative easing.

Conclusion - The positive tone of the January employment report is noteworthy. But, the 8.3% jobless rate of January is a far cry from the Fed’s latest estimate of a long term unemployment rate of 5.2-6.0%. As Charts 4 and 5 indicate, hiring remains far from the peak seen in the earlier business cycle and there is still a large amount of unused labor capacity in place. Current inflation and inflation expectations do not present a threat. The personal consumption price index (the Fed's preferred measure of inflation) shows a moderating trend after recording high readings in spring and summer of 2011 (see Chart 8). Inflation expectations are also running below levels seen in the early months of 2011 (see Chart 9). Putting together the current inflation and unemployment readings, the third round of quantitative easing remains in the realm of possible action in the near term to enable the Fed to fulfill its dual mandate of full employment and price stability

 

Asha Bangalore — Senior Vice President and Economist

http://www.northerntrust.com

Asha Bangalore is Vice President and Economist at The Northern Trust Company, Chicago. Prior to joining the bank in 1994, she was Consultant to savings and loan institutions and commercial banks at Financial & Economic Strategies Corporation, Chicago.

Copyright © 2012 Asha Bangalore

The opinions expressed herein are those of the author and do not necessarily represent the views of The Northern Trust Company. The Northern Trust Company does not warrant the accuracy or completeness of information contained herein, such information is subject to change and is not intended to influence your investment decisions.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

JackieG
04 Feb 12, 23:15
U.S. January Employment Situation

Now I know for sure the government is lying.

Pure chutzpah!!

Lies so audacious and huge even the perpetrators laugh among themselves at the shear idiocy of their own claims.

All I see is the ships being parked the world over.

And that my dear friends, does not give rise to employment.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules