News Column

US Jobless Numbers Counted as Good News

Feb. 4, 2013

Deborah M. Todd

Employment application

The nation added 157,000 jobs in January, but the big story wasn't the jobs that were added in January, but those that went uncounted in 2012.

The Bureau of Labor Statistics significantly revised earlier estimates from 161,000 to 247,000 jobs in November and from 155,000 to 196,000 in December.

The national unemployment rate saw a marginal increase from 7.8 percent in December to 7.9 percent.

Wall Street reacted positively to Friday's news with the Dow Jones industrial average finishing above 14,000 for the first time since 2007.

"The takeaway is the unemployment rate did increase a little bit, but when you look at the numbers in detail we had across-the-board gains," said Mekael Teshome, assistant vice president and economist with PNC Financial Services. He said the report lines up with PNC's projections of persistent moderate growth for the year.

Alan Krueger, chairman of the White House Council of Economic Advisors, said the report was generally positive but falls short of what is needed for a full-fledged recovery.

"While more work remains to be done, today's employment report provides further evidence that the U.S. economy is continuing to heal from the wounds inflicted by the worst downturn since the Great Depression," Mr. Krueger said in a statement.

Mr. Krueger's words seconded assertions made in a statement released Wednesday by the Federal Reserve. The Fed said the nation's economy had "paused" in recent months partially due to weather-related issues but also because of lingering unemployment and other factors. To boost the recovery and hold back inflation, the Fed said it would continue its strategy of purchasing an average of $40 billion per month in mortgage backed securities and $45 billion per month in long-term treasury securities.

Gains in retail, construction, health care and wholesale trade jobs supported losses in transportation and housing employment. Retail jobs increased by 33,000 in January, up from an average monthly gain of 20,000, health care added 23,000 jobs and wholesale trade jobs increased by 15,000.

The construction industry added 28,000 new jobs in January, possibly a result of an increase in building permits, housing starts and housing completions in December.

Spending on U.S. construction projects rose in December to a seasonally adjusted annual rate of $885 billion, the Commerce Department said Friday. That was up 0.9 percent from November, when spending increased a revised 0.1 percent. For all of 2012, construction spending totaled $850.2 billion, a gain of 9.2 percent from 2011, when construction spending had fallen 3.3 percent.

In manufacturing, the industry's Purchasing Manager's Index rose 2.9 percent from December to 53.1 percent in January, according to the Tempe, Ariz.,-based Institute for Supply Management. The report also marked increases in new orders.

"Manufacturing is starting out the year on a positive note, with all five of the PMIs component indexes -- new orders, production, employment, supplier deliveries and inventories -- registering above 50 percent in January," reads a portion of the report.

The nation's small businesses saw gains on a much smaller scale, according to a release from the Washington, D.C.-based trade organization, the National Federation of Independent Business. The organization's monthly economic survey shows that the average small employer increased employment by 0.09 workers in January, up from 0.03 workers in December. In total, 11 percent of surveyed small business owners added employees and 9 percent reduced employment.

"This is the second consecutive month with positive growth and is sadly the best reading since April 2012. That's not saying much," the organization's chief economist William Dunkelberg said in a written statement.

January marked the 35th straight month of private sector job creation, with jobs growing at a pace of more than 175,000 per month since February 2010, according to a report by Chad Stone, chief economist for the Center on Budget and Policy Priorities. However, Mr. Stone warned that the recovery could grind to a halt next month if severe budget cuts go into effect as part of a deficit reduction plan.

Echoing future budgetary concerns, Mr. Krueger encouraged Congress to act responsibly.

"Today's report is a reminder of the importance of the need for Congress to act to avoid self-inflicted wounds to the economy," he said.

The Associated Press contributed to this report.



Source: (c)2013 Pittsburgh Post-Gazette Distributed by MCT Information Services


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