NOW THE SPIN BEGINS – AT 8:42 A.M. ET: The unemployment rate has dropped to 9.7%, which the Obama administration will use to tell us that things are improving.
But the devil, as usual, is in the details, which aren't so delightful.
WASHINGTON (Reuters) - Employers unexpectedly cut 20,000 jobs in January, but the unemployment rate surprisingly fell to a five-month low of 9.7 percent, according to a government report on Friday that hinted at some labor market improvement starting to take root.
The Labor Department said the economy shed 150,000 jobs in December, compared to 85,000 previously reported, but November was revised to a gain of 64,000, up from 4,000. Annual benchmark revisions to payrolls data showed the economy has purged 8.4 million jobs since the start of the recession in December 2007.
Analysts polled by Reuters had forecast payrolls gaining 5,000 and the unemployment rate to edge up to 10.1 percent in January from 10 percent. Median estimates from the top 20 forecasters expected payrolls to be unchanged last month.
A sharp increase in the number of people giving up looking for work helped to depress the jobless rate. The number of 'discouraged job seekers' rose to 1.1 million in January from 734,000 a year ago.
COMMENT: So, the decline in the jobless rate isn't due to new employment, but to people just giving up. We have a new army of the chronically unemployed. Also, some of the news jobs come from the federal government, hiring thousands of workings to conduct the 2010 census.
Not out of the soup by any means.
February 5, 2010