Friday, February 6, 2009

January Jobs... Unemployment Rate 7.6%, Loss of 598,000

This was worse than the 525,000 that was expected. Seasonally adjusted U-6 is now 13.9%, up from 13.5% in December, and a soaring 15.4% unadjusted.

U.S. Jobless Rate Soars as Payrolls Plunge by 598,000

By Shobhana Chandra

Feb. 6 (Bloomberg) -- The unemployment rate in the U.S. climbed to the highest level since 1992 in January and payrolls tumbled as the recession showed no sign of abating.

The jobless rate rose to 7.6 percent from 7.2 percent in December, the Labor Department said today in Washington. Payrolls fell by 598,000, the biggest monthly decline since December 1974, after dropping by 577,000 in the previous month.

The loss of jobs, at employers ranging from manufacturers like Caterpillar Inc. to retailers such as Macy’s Inc., is shattering consumer confidence and crippling spending. President Barack Obama is likely to use the first employment report since he took office to prod lawmakers into agreeing on a compromise economic stimulus package by the end of this month.

“We’re losing jobs at an alarming pace and bracing for more weakness,” Scott Anderson, senior economist at Wells Fargo & Co. in Minneapolis, said before the report. “The private sector is flat on its back at this point. The government needs to step in with a stimulus, the sooner the better.”

Treasuries slipped while stock-index futures headed higher after the figures. Contracts on the Standard & Poor’s 500 Stock Index gained 0.3 percent to 843 at 8:34 a.m. in New York. Benchmark 10-year note yields rose to 2.92 percent from 2.90 percent late yesterday.

Deeper Cuts
With a revised decline of 597,000 jobs in November, revisions subtracted 66,000 workers from previously reported payroll figures for the last two months of 2008. The U.S.
economy has now lost a total of 3.57 million jobs since the recession started in December 2007, the biggest employment slump of any economic contraction in the postwar period.

Last month’s losses mark the first time since records began in 1939 that job cuts exceeded half a million in three consecutive months.

Payrolls were forecast to drop 540,000, according to the median estimate of 75 economists surveyed by Bloomberg News. Estimates of the decrease ranged from 400,000 to 750,000.

The jobless rate was projected to jump to 7.5 percent. Forecasts ranged from 7.3 percent to 7.6 percent.

Well, the market is evidently thinking that this wasn’t a total disaster. Of course to any of the real people behind this huge number, it is.

Here’s a link directly to the BLS Announcement.
These adjustments are huge again. If it were up to me, I’d dismantle the BLS and start over:
“The change in total nonfarm employment for November was revised from -584,000
to -597,000, and the change for December was revised from -524,000 to -577,000.
Monthly revisions result from additional sample reports and the monthly recalculation of seasonal factors. This month, the annual benchmarking process also contributed to these revisions.”
The BLS changed some of the methodologies again – ugh. Details can be found within the BLS Announcement.

Here is an employment chart from John Williams. It reflects unemployment numbers that are closer to the way they used to be calculated and, as you can see from the U6 number (15.4%), it is huge. This chart will automatically update once John Williams gets the data in:
Chart of U.S. Unemployment