Friday’s US unemployment report showed the job market continued healing in January. Here’s a slightly granular look at the data to help illustrate the point.
Ok, we know. This is really the same number repeated four times. But it’s also the percentage-point decline in the monthly unemployment rate from October, November, December and (now) January. Another way to show these numbers would be 8.9%, 8.7%, 8.5% and 8.3%—the current unemployment rate as of Friday.
January 2011 and October 2009 unemployment rates, respectively. The former—one year ago—is 0.8 percentage points higher than today. The latter is the highest rate since the recession began, fully 1.7 percentage points higher than January 2012’s.
The difference between current unemployment and the US’s long-term average.
These data underlie the BLS’s household survey—the source of the headline unemployment rate. In sequence, they are: The number of hires in January 2011, the increase in the working-age population and the number of unemployed who found jobs. The point: Hiring data outpaced an increased labor force. This implies job creation exceeded workforce growth.
December 2011 and January 2012’s labor force participation rates. Still below the average since 1980 of around 66%, but the lack of a big decline seemingly implies January’s unemployment rate decline wasn’t heavily swayed by discouraged job hunters ending their search.
The number of new private-sector hires per the BLS’s establishment survey, the number of government layoffs and the net change in total nonfarm payrolls.
Total private-sector payrolls as of February 2010’s trough—and the same as of January 2012. The private sector has added 3,663,000 jobs over that span. Still below the roughly 115 million before 2007-2009’s recession, but a noteworthy improvement.
The change in government employment since January 2011.
March 28, 2009’s four-week moving average of initial jobless claims—the highest mark in recent years. Followed by the same figure from January 28, 2012.
US real GDP growth for full-year 2011. Private-sector hiring in 2011. And solid reasons to be skeptical of claims we need (insert higher figure than we’ve seen here)% GDP growth to create jobs.
But while many parsed the jobs numbers—some pleased, others ... not as much—we believe it’s important to recall unemployment is a late, lagging indicator—growth begets jobs. So let’s take note of other numbers.
The US’s dominant services sector grew again in January, as the ISM Services Index sharply accelerated to 56.8 from December’s 53.0—expanding and easily topping analysts’ estimates of 53.8. Across the pond, the UK’s dominant services sector similarly grew. And as reported yesterday, January US retail sales showed solid growth—despite latent fears of a post-holiday hangover. All positive—and likely indicating irregular job market improvements lie ahead.
Ultimately, there are many ways to break down unemployment data. But what Friday’s data seemingly show is (unsurprisingly) growth led to jobs ... and continued growth in January.
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