Unemployment drops to 9.7%
posted at 8:55 am on February 5, 2010 by Ed Morrissey
For once, the AP uses its favorite adverb correctly:
The unemployment rate dropped unexpectedly in January to 9.7 percent from 10 percent while employers shed 20,000 jobs.
The Labor Department says the rate dropped because a survey of households found the number of employed Americans rose by 541,000. The job losses are calculated from a separate survey of employers.
The report also included an annual revision to the estimates of total payrolls, which showed there were 930,000 fewer jobs last March than previously estimated. The department also revised down its estimates for April through October of last year, adding another 433,000 job losses.
However, November’s numbers got a boost from 11,000 jobs created to 64,000 jobs created. The net losses in December went from 85,000 to 73,000. Another indicator doesn’t look as good, though. Tax collection on payroll dropped sharply in January, in the same way as last year (via Dog Soldier):
Taxes are another indicator of payrolls, specifically withheld income taxes. The daily Treasury Department statement tracks withheld income taxes. In January, income taxes withheld dropped about 9.4% from December, about the same as the drop from December 2008 to January 2009. December withholdings are sometimes inflated due to end-of-year bonuses. That the decline from December to January this year was the same as last argues that the direction of payroll jobs will track year-year.
Moving out of the double-digits on unemployment will be a political boost for Barack Obama, but the improvement is less dramatic than that. The civilian employment population (ie, looking for jobs) finally increased by 111,000 people, the first increase in several months, but over 1.5 million left the job force in 2009. Furthermore, the hiring mostly took place in the government sector:
Construction employment declined by 75,000 in January, with nonresidential specialty trade contractors (-48,000) accounting for the majority of the decline. Since December 2007, employment in construction has fallen by 1.9 million.
In January, transportation and warehousing employment fell by 19,000, due to a large job loss among couriers and messengers (-23,000).
Employment in manufacturing was little changed in January (11,000). After experiencing steep job losses earlier in the recession, employment declines moderated considerably in the second half of 2009. In January, job gains in motor vehicles and parts (23,000) and plastics and rubber products (6,000) offset small job losses elsewhere in the industry.
In January, temporary help services added 52,000 jobs. Since reaching a low point in September 2009, temporary help services employment has risen by 247,000.
Retail trade employment rose by 42,000 in January, after showing little change in the prior 2 months. Job gains occurred in January among food stores (14,000), clothing stores (13,000), and general merchandise retailers (10,000).
Health care employment continued to trend up in January. Ambulatory health care services added 15,000 jobs over the month.
In January, the federal government added 33,000 jobs, including 9,000 temporary positions for Census 2010. Employment in state and local governments, excluding education, continued to trend down.
It’s not as bad as people feared, but it’s not really good news, either. The bounce in retail suggests that people may be ready to spend, but the declines in most other areas show that there are still fewer of them who can.
Update: This passage seems like a key to understanding why the rate dropped:
In January, the number of persons unemployed due to job loss decreased by 378,000 to 9.3 million. Nearly all of this decline occurred among permanent job losers. (See table A-11.)
The number of long-term unemployed (those jobless for 27 weeks and over) continued to trend up in January, reaching 6.3 million. Since the start of the recession in December 2007, the number of long-term unemployed has risen by 5.0 million. (See table A-12.)
As before, shrinking the denominator of the population of jobseekers has the same effect as increasing the nominator of people holding jobs — it decreases the ratio of unemployment to the population. Also, according to this chart, December’s losses got adjusted to 150,000, not 73,000. We’re still trending downward.
Update II: The civilian employment population increased by 111,000, not the employment level as I originally wrote. Thanks to BizzyBlog for pointing out my error.
Update III: Here’s a relatively new chart from BLS to look at differing measures of unemployment:
U-3 is the published unempl0yment rate, while U-6 has become a lot more popular over the last couple of months as a measure of “true” unemployment. Both improved month on month when seasonally adjusted, which is good news. Without the seasonal adjustment, both jumped rather significantly. Most people use the seasonally-adjusted numbers when comparing for progress.
Blowback
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What if reported unemployment falls to 8.9% and GPD post 4 consecutive quarters of growth above 3% prior to the November elections? Don’t you think swing voters will see that as a benefit (even if it’s only temporary – in other words – even if the benefit disappears after the election)?
blink on February 5, 2010 at 4:16 PM
I personally can’t believe you can’t see how stupid you seem. There is no benefit if it doesn’t pan out in the end. What’s the point in buying a million dollar house if you only have it for a year because you can’t afford it? You end up being homeless and probably falling behind on other bills.
Where as on the other hand, if you buy a modest house that you can afford and possibly make better and keep it for 30 years or even if you sell it and make a profit, you have a short and a long term benefit.
A benefit is not a benefit if it doesn’t play out as benefiting you in the long run in my opinion. Again, I don’t know anyone who thinks the way you are thinking.
MobileVideoEngineer on February 5, 2010 at 4:16 PM
Not if they know the truth and see that it’s not real. These numbers are not real. None of this is sustainable. I think they’ll have a hard time sustaining this much past March let alone November.
MobileVideoEngineer on February 5, 2010 at 4:18 PM
So a short term benefit really isn’t a short term benefit if it doesn’t eventually become a long term benefit? This doesn’t make any sense.
Does an 8 hour pain reliever provide any benefit for chronic pain? After all, the pain relief benefit wears off after 8 hours so there is no benefit. Gee, someone should tell people that they’re wasting billions of dollars on this stuff since there is no benefit.
Do you really want me to keep making you look like an idiot?
blink on February 5, 2010 at 4:20 PM
OK. You define real, then explain your definition of real to the swing voters while the liberal media is telling them the opposite. Good luck with that. Let me know how it works out for you.
Are you stating this definitively? Are you predicting that the next quarterly GPD report will be negative?
Who is they?
What if it is sustained until November? Then what?
blink on February 5, 2010 at 4:23 PM
We’re not talking about pain. We’re talking about finances. You are clearly the idiot if you can compare taking medicine to finances.
If you are so smart with finances, why must you compare it to something that has nothing to do with finances?
MobileVideoEngineer on February 5, 2010 at 4:24 PM
They is everyone in Washington who is trying to prop this economy up.
If people who are out of work and can’t find work still want to vote for these morons by November then whatever, there isn’t anything we can do to stop their stupidity.
People are waking up to the crap that’s going on. There were only 6% points from McCain and Obama, I think a lot more than 6% has woken up to the fact that everything going on is just a shell game.
And if I’m wrong, oh well, if they haven’t woken up by now, the Republicans “admitting” that this is moderately working is not going to change their minds.
MobileVideoEngineer on February 5, 2010 at 4:29 PM
Huh?????????????
Dr. ZhivBlago on February 5, 2010 at 4:30 PM
Translation: Please, blink, please stop making me look like an idiot.
MobileVideoEngineer, the concept of benefit can be applied to anything.
Actually, I’m very smart with finances.
I didn’t. I compared it to macroeconomics. Surely you understand the difference between finance and macro-economics, right?
Benefit is a microeconomic term. It’s completely appropriate to discuss the benefit of pain relief in a microeconomic sense. And it’s completely appropriate to discuss microeconomic concepts during a macroeconomic discussion. In fact, it’s kinda impossible to discuss macroeconomics without using microeconomic principles.
blink on February 5, 2010 at 4:30 PM
There’s nothing to admit.
Conservatives can merely start saying, “Any improvement to our domestic economy this year will be constrained by reckless spending and bad fiscal policies. We want to end reckless spending and set this county on a course for unprecedented growth by releasing the American people from burdensome taxes and end government ownership and interferences in honest business.”
This is much better than, “it’s going to be all doom and gloom unless you vote for us in November.”
blink on February 5, 2010 at 4:36 PM
If you think the people are stupid enough to vote for liberals simply because the unemployment rate goes from 10 to 8.9 percent while we had below 5 percent unemployment towards the end of Bush’s first term, then why do you think they would understand all of that?
That is exactly what people here are trying to say. There is an “improvement” on the outside, but if you dig deeper into the numbers and how those numbers came about, it’s not good news at all.
MobileVideoEngineer on February 5, 2010 at 4:41 PM
Very dishonest of you to imply JUST the unemployment rate when I was also very clear about the GDP.
Anyway, yes, I think it will look bad if Republicans are preaching nothing but doom and gloom while unemployment dips below 9 and we have 4 consecutive quarters of GDP growth.
I think it might make them look bad enough to miss getting one of the two chambers of Congress.
blink on February 5, 2010 at 4:47 PM
Desperation, pure and simple. Even the most turned-around Obamabot knows that we’re stuck with him for the next 3 years, and his policies have already made Bush look like Solomon.
Former supporters will be looking for ANY sign that he’s doing something right. Ditto for detractors, for different reasons. People who don’t give two hoots about the ivory-tower DC crowd are hoping for a turnaround in the economy so our hopes and dreams aren’t put on hold due to a complete lack of funds.
Dark-Star on February 5, 2010 at 4:48 PM
Can you show us where that scenario has happened?
You might want to take some time and read up on Okun’s law…
No charge for teaching you econ 101…
right2bright on February 5, 2010 at 4:54 PM
I can hear blinks google searching fingers from here in NC…
right2bright on February 5, 2010 at 4:56 PM
Unemployment percent is a JOKE. It can only get so high, and it basically almost reached it, and that is because the administration is fudging the numbers.
There is like 6 million on Government extended payments.
It is a joke.
It will be back to 6% in a year if NOT ONE MORE person was hired.
WoosterOh on February 5, 2010 at 4:59 PM
Ha, me being dishonest, that’s funny. I never said anything about preaching doom and gloom, I simply said there is no point in saying that Obama’s policies are working and saying there is a benefit.
I frankly am a little more upbeat about the people that are starting to see all of the lies and number fudging going on. I never said it was a good idea to preach doom and gloom, I simply think it’s a good idea to route out the lies and show the truth.
I think a lot more people know the truth than you may think. And if they don’t, having Republicans say what you want them to say won’t change that. Everyone tried to explain that this was going to happen before the election even occured (even back in 2006 when the Democrats took both houses) and look where that got us.
MobileVideoEngineer on February 5, 2010 at 5:02 PM
I know all about Okun’s research. There are plenty of outliers in the data on which he based his average relationship which, by the way, you misrepresented.
Okun’s law certainly doesn’t preclude the possibility of my scenario occurring.
You might want to accurately convey economic principles before you claim to be teaching them.
blink on February 5, 2010 at 5:10 PM
There is the rub…you really can’t count government increase as an unemployment decrease.
That would mean if everyone is employed by the government we would have a healthy country?
An increase in gov. has to be an increase in taxes to pay for that…short term you can manipulate any data…but Okun’s law prevails…
right2bright on February 5, 2010 at 5:12 PM
Yes, you dishonestly left GDP out of your response.
Reread the message that I wrote! I didn’t say anything about “saying Obama’s policies are working…”
You are by far the stupidest person that has been arguing this issue with me today.
Me, too. I want it to last.
blink on February 5, 2010 at 5:13 PM
Everyone tried to explain what?
blink on February 5, 2010 at 5:15 PM
Okay, brainiac (and good on the Googling)…now back up your claim where I misrepresented Okun’s law.
Seeing as I only quoted an economic dictionary.
…I will of course humbly accept your apology for misstating your post and accusing me of misrepresenting Okun’s law.
right2bright on February 5, 2010 at 5:15 PM
And next time thank me, blink, for educating you…you young boys have such ego’s…
right2bright on February 5, 2010 at 5:17 PM
LOL, you noticed how long it took him to respond as well?
MobileVideoEngineer on February 5, 2010 at 5:17 PM
You implied the use of his relationship precludes the possibility of both GDP growth and reduced unemployment at a rate other than 2.5%.
2.5% is merely an average relationship and was never meant to govern independent movements in either metric.
blink on February 5, 2010 at 5:27 PM
Please, as if I haven’t been discussing this very issue for the past 6 to 9 months with others that actually, you know, understand this stuff. This ground was covered and vacated very quickly.
blink on February 5, 2010 at 5:29 PM
Sorry, I’ve been on this thread all day. It’s clearly losing steam, but I’ll try to check on this page more frequently for you.
Do you mind if I take occasional breaks or even log off at some point?
blink on February 5, 2010 at 5:30 PM
Hey MobileVideoEngineer,
Does an 8 hour pain reliever provide any benefit for chronic pain?
After all, the pain relief benefit wears off after 8 hours so there is no benefit, right?
Should someone should tell people that they’re wasting billions of dollars on this stuff since there is no benefit.
blink on February 5, 2010 at 5:32 PM
It will be a big factor, as I have stated, what I stated was that a tiny improvement between now and then will not benefit Barry.
Will you for once, manage to accurately portray the arguments of others?
MarkTheGreat on February 5, 2010 at 5:32 PM
Then again, you think your inane analogies are meaningfull.
MarkTheGreat on February 5, 2010 at 5:33 PM
Then you are more clueless than you led us to believe.
MarkTheGreat on February 5, 2010 at 5:34 PM
Talking about yourself again?
MarkTheGreat on February 5, 2010 at 5:35 PM
Didn’t you like my pain reliever concept?
blink on February 5, 2010 at 5:36 PM
Give him a break. When he tried to make more substantial posts, he just got laughed at.
MarkTheGreat on February 5, 2010 at 5:36 PM
Why not ask what voters will think if their unicorns arrive before Nov?
MarkTheGreat on February 5, 2010 at 5:37 PM
He actually believes that as long as the voters can be conned long enough to get them to the polls, that will be all that matters.
MarkTheGreat on February 5, 2010 at 5:38 PM
I made a statement about what I think. How can such a statement inaccurately portray your argument?
blink on February 5, 2010 at 5:38 PM
It is generally considered bad form to contradict yourself on the same day as your original posts.
MarkTheGreat on February 5, 2010 at 5:39 PM
Says the guy that wouldn’t definitely state that economic improvements wouldn’t occur prior to November.
blink on February 5, 2010 at 5:40 PM
Yes, it is. That’s why I don’t do it.
blink on February 5, 2010 at 5:40 PM
This isn’t an accurate depiction of my beliefs.
blink on February 5, 2010 at 5:41 PM
Your reading comprehension fails yet again.
It wasn’t my comment that you mischaracterized.
MarkTheGreat on February 5, 2010 at 5:42 PM
Yea, and you still think your analogies are meaningfull.
MarkTheGreat on February 5, 2010 at 5:43 PM
Stop trying to play stupid games – unless it’s all you have left in this argument.
blink on February 5, 2010 at 5:46 PM
Didn’t you like my question about the pain reliever?
blink on February 5, 2010 at 5:47 PM
Btw, they are very meaningful.
In fact, I bet you agree. You just don’t want to admit it because they helped me destroy your argument.
blink on February 5, 2010 at 5:48 PM
Yawn, this is getting boring.
blink on February 5, 2010 at 5:48 PM
You idiot…that was a definition from a finance dictionary, it is a definition…it is between 2% and 3% in other dictionaries.
Now I ask you again…be honest…where did I misrepresent Okun’s law?
If I didn’t, an apology please…I really thought you would be man enough to admit that you mis read my post, and that you were wrong.
Let’s see know if you GET IT!
right2bright on February 5, 2010 at 5:55 PM
I already explained it.
I never claimed that you misrepresented what the dictionary stated.
But you certainly misrepresented the law in giving it relevance to a certain application.
You get no apology.
blink on February 5, 2010 at 6:06 PM
Do you get a bonus from Axlerod for ‘winning’?
daesleeper on February 5, 2010 at 6:08 PM
No. If that was the case, then there would be too many instances of bonus payments.
blink on February 5, 2010 at 6:09 PM
wow. So did you answer a cragslist ad? in the non for profit section?
daesleeper on February 5, 2010 at 6:12 PM
The government’s unemployment rate is becoming more and more detached from reality. The BLS is in a battle with the warmists to see who can reach zero credibility first. I think the warmists are still ahead but the BLS is gaining.
MB4 on February 5, 2010 at 6:19 PM
Gee what a surprise…I never represented it as anything but what the definition was…you are a fool. You still never stated where I misrepresented, you just make accusations, without backing them up.
But at least I taught you one economic lesson. If anything that will stick with you and you will build on that. Read enough and soon you won’t be a fool.
Learn to be humble, learn to know when you errored, learn to embrace the fact that when you falsely accuse someone, ask forgiveness. Until then, you are just a fool posting whatever you want, and disregarding any truth or challenge that you may have made a mistake.
You will continue to be laughed at and mocked…as you have been the last few pages.
right2bright on February 5, 2010 at 6:42 PM
I am having a hard time reading. Is that blink or bunk?
CWforFreedom on February 5, 2010 at 6:44 PM
Reality check from Money.com
CWforFreedom on February 5, 2010 at 6:50 PM
Did you miss this?
AND this?
First, I don’t know why it’s misrepresented as a law. But I acknowledge that you may have been accurately quoting a online dictionary when you made that misrepresentation.
Obviously, Okun’s relationship between GDP and unemployment is based data. Did you even spend 10 seconds looking at the data? Did you even eyeball an R-squared?
Don’t throw out Okun’s research as if can counter can scenario of GDP rise and unemployment occurring. Doing so misrepresents it.
I’m sorry if I hurt your feelings. Don’t play with the big boys if you don’t want to get hurt. I wouldn’t have had to do it if you hadn’t been so condescending.
blink on February 5, 2010 at 7:47 PM
This should have read
Don’t throw out Okun’s research as if can counter a scenario of GDP and unemployment rising.
blink on February 5, 2010 at 8:02 PM
Black Knight
batterup on February 5, 2010 at 8:24 PM
Unemployment drops to 9.7% Thanks to a couple of hundred thousand more useless leeches on the government payroll. A 40% employement gain in DC and a 15 % drop everywhere else.
MaiDee on February 5, 2010 at 11:14 PM
To blink, let me define what is real for you. I’ve been unemployed since June 2009. My unemployment benefits expired the week of Christmas. I’ve been denied extended benefits because my last employer was not in the state that I received compensation from and that other state is denying my claim because I claimed elsewhere. So, now I’m classified as no longer seeking employment! A classification that the 13 employers that received my resume or application this week alone may disagree with. The 9.7% figure does not truly encapsulate the desperation we are facing today. I’m certain there are a higher percentage like me than those that are truly no longer seeking work. In the nearly 8 months since I lost my job I’ve applied for over 300 different jobs, unfortunately 10,000 other people lost their jobs in my area around the same time that I did.
Is that real enough for you, blink?
rmel80 on February 6, 2010 at 6:03 AM
Just a reminder: We lost jobs again last month.
forest on February 6, 2010 at 8:46 AM
So let me get this right, NFP down 20k, the previous 2 months revised down 30k, first time unemployment claims increased 100k, announced layoffs way up, income/payroll tax collections down, consumer confidence down, NSA unemplyment skyrocketed to 10.6%, but we added jobs at a 4% annual rate. Riiiiiiight.
Unemployment rate is determined by the household survey which indicated over half a million jobs were created in January.
jarodea on February 6, 2010 at 9:05 AM
rmel80,
I’m truly sorry for your problems, but what you’re describing isn’t germane to the princlples we were discussing.
blink on February 6, 2010 at 2:17 PM
He actually believes that as long as the voters can be conned long enough to get them to the polls, that will be all that matters.
MarkTheGreat on February 5, 2010 at 5:38 PM
If that’s what he believes, he’s right….I give you 2008 as a great (and most recent) example.
Surely you can admit this much, even if he denies it’s what he meant….we all saw it!
runawayyyy on February 7, 2010 at 1:45 PM
Of course I believe that too many voters can be fooled during an election – that’s why we have Obama.
But I have never advocated attempts to manipulate swing voters.
I’m merely trying to play defense against the other side manipulating swing voters.
blink on February 8, 2010 at 12:24 PM
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