Unemployment rate down to 9% with only 36,000 new jobs created? 10 reason why it can’t!
Michael Haltman | February 5, 2011
.4% drop in the headline unemployment rate to 9%, yet only 36,000 non-farm payroll jobs were created?
How can A happen when B occurs? It really makes no sense when the general consensus is that 150,000 non-farm payroll jobs needs to be added each month just to maintain the unemployment rate at the same level as the month before.
Even the Wall Street "experts" were confused. You know, the economists whose accuracy in forecasting the state of business is rivaled only by the guys on T.V. who predict the weather. Comments in The New Yorker included:
â€œGiven the confounding nature of this report, we will have to wait at least another month to see if the labor market is rebounding strongly,â€ said Heidi Shierholz, of the Economic Policy Institute.
â€œItâ€™s all a mystery,â€ said Robert Brusca, chief economist at F.A.O. Economics.
â€œUntil we see a sustained period of stronger job creation,â€ Bernanke said, â€œwe cannot consider the recovery to be truly established.â€
Here are 10 reasons why the unemployment report on Friday was nothing to write home about
#1 According to CNBC, economists were expecting the U.S. economy to add 145,000 jobs during January. Obviously the 36,000 figure was a huge disappointment.
#2 Approximately 150,000 jobs need to be added to the economy each month just to keep up with population growth.
#3 The government jobs report also indicated that 504,000 Americans "dropped out of the labor force" in January. That may make the unemployment numbers look better, but the truth is that the vast majority of those 500,000 Americans still need incomes and still need jobs.
#4 According to the latest numbers from Gallup, the unemployment rate actually increased to 9.8% at the end of January.
#5 Gallup's measure of "underemployment" (those that are unemployed plus those that are working part-time but want full-time employment) was sitting at 18.9% at the end of January.
#6 As I reported yesterday, there are approximately 28 million Americans that would like full-time jobs but that don't have full-time jobs.
#7 According to Zero Hedge, the number of Americans that are "not in the labor force" but that would like a job right now has hit an all-time record high. If you add all of those people into the official unemployment figure it would jump to 12.8%.
#8 According to Calculated Risk, this is the deepest and most brutal employment downturn that the United States has experienced since World War II. The current employment downturn started 37 months ago and there doesn't seem to be any indication that we will return to pre-recession levels any time soon.
#9 The U.S. Labor Department has also announced that job growth during 2010 was much weaker than they had previously reported. The numbers for 8 months were revised down, and the numbers for 4 months were revised up. After all of the revisions are accounted for, it turns out that a total of 215,000 fewer jobs were created during 2010 than originally calculated.
#10 According to one brand new survey, 4 out of every 10 Americans are struggling "a lot" to pay the bills right now.
10 reasons list from The ECB
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