In the January jobs number it’s the upside surprise that counts

Not just a good U.S. jobs number for January this morning but a surprisingly good jobs number. The U.S. economy added 243,000 jobs in January, up from a gain of 220,000 jobs in December. The private sector added 257,000 jobs in the month. Over the last three months the U.S. private sector has added 655,000 jobs.

Economists analyzing December’s data had pointed out that about 40,000 temporary workers hired by UPS and FedEx in December to delivery holiday packages would probably be let go in January. That would put a big drag on the January jobs number, economists reasonably concluded. Going into today’s release from the Bureau of Labor Statistics, economists surveyed by Briefing.com were expecting nonfarm payrolls to climb by 168,000.

The January jump in jobs looks to be connected to a recent drop in layoffs. Read more

A promising set up today in the weekly initial claims for unemployment data for tomorrow’s release of the December jobs number.

For the week that ended December 31 the number of people filing new claims for unemployment dropped to 372,000. That was a significant decline from the 387,000 initial claims filed in the week ended December 24. Economists surveyed by Briefing.com had expected the initial claim number to drop to 375,000.

Even the continuing claims for unemployment number dropped to a still –horrendous 3.595 million for the week from 3.617 million the week before.

Today’s improved initial claims numbers argue that there’s a good chance that the non-farms payroll number to be released tomorrow will show something better than the 150,000 increase expected by economists, according to Briefing.com.

In November payrolls grew by a net 120,000 jobs. That was up from a revised 100,000 gain in October. A 150,000 gain in jobs for December would create a three-month upward trend.

That in itself would be greeted with cheers by a stock market that sees growth in the U.S. economy as the only growth story in town at the moment. Read more

Good news this morning on unemployment–with the usual seasoning of worry

(Guarded) optimism reigns this morning after initial claims for unemployment came in below forecast and consumer confidence climbed.

The “guarded” nature of today’s optimism, however, results from yet another cut to U.S. third quarter GDP growth on the third revision to the statistics and a sneaking suspicion among economists that the good news on the economy is only temporary.

As of 1:30 New York time the Dow Industrial Average was up 0.6% and the Standard & Poor’s 500 Stock Index was up 0.8%. In Europe the German DAX Index closed up 1.1%, the French CAC 40 was up 1.4%, and the Spanish IBEX 35 was up 1%.

New claims for unemployment in the United States fell by 4,000 to 364,000 for the week ended on December 17, the Department of Labor announced. That’s the lowest level for initial claims since April 2008. Economists surveyed by Bloomberg had projected an increase in initial claims to 380,000 for the week.

The revised Michigan Consumer Sentiment Index climbed to 69.9 in December from an initial reading of 67.7. Economists had expected a revision to 68.0.

It’s only logical that a drop in new claims for unemployment would go together with improved consumer confidence—if fewer people are losing their jobs, consumers feel better about spending. Lending a helping hand are the cheapest gasoline prices since February. That puts more money in consumers’ wallets and takes some strain off of family budgets.

But we very seldom get good news these days without a caveat—and today is no exception. Read more

The U.S. economy continues to demonstrate remarkable strength. That isn’t to say this isn’t a sub-par recovery or that growth in 2012 won’t slow as Europe’s economies slide toward recession. But given the seemingly endless flow of bad news from elsewhere even modest growth is remarkable.

Today the U.S. Department of Labor announced that initial claims for unemployment fell to 366,000 for the week ended December 10. That was a significant drop from 385,000 in the week ended December 3 and was the lowest initial claims number since May 2008. The four-week moving average, which takes out weekly volatility, fell to 388,000, the lowest level since July 2008.

Economists, demonstrating that they can get as depressed as anyone by negative news flow, had forecast that initial claims would climb slightly for the week to 390,000, according to Briefing.com

The Department of Labor had warned after initial claims dropped in 385,000 for the week ended December 3 that the figures might be subject to difficulties in correcting for the effects of the Thanksgiving holiday. This week the numbers don’t have that problem. This seems to be an accurate reflection of what is, at least, a temporary swing in employment.

Let’s put this in context. Read more

Why the drop in official unemployment rate to 8.6% in November isn’t as good as it seems

Good enough news on jobs this morning not to send stocks tumbling. But not good enough to be a reason for stocks to move up from here. It looks like that still depends on good news from Europe.

U.S. payroll numbers climbed in November to a net gain of 120,000. That was just about equal to the 123,000 expected by economists surveyed by Briefing.com.

The official unemployment rate showed a huge drop to 8.6% from 9%, but I think we can basically ignore that number since it was a result of a big 300,000 drop in the labor force and an increase in seasonal (that is, temporary) jobs for the holiday season. To be counted in the official unemployment number you have to have looked for work in the last four weeks. (Too discouraged to look? Well, then you’re not unemployed. In a related number the percentage of the official unemployed who have been unemployed for 27 weeks or longer climbed to 43% of all unemployed from 42.4%.) To be counted you also have to be available for work, so if you have a temporary job that will end in January, you no longer count as unemployed. (The Bureau of Labor Statistics does try to adjust its numbers to account for seasonal hiring trends but seasonal adjustment is always tough and it has been especially inaccurate during this agonizingly slow economic recovery when a lot of past patterns have been violated.)

The full unemployment rate, which counts discouraged workers and workers who with part-time jobs but who would like full-time work, dropped to 15.6% in November from 16.2%. Even that number counts people with temporary jobs as employed.

The most disappointing part of today’s numbers for me, however, came in the income section of the statistics. Read more