This morning’s employment data is likely to turn the “double dip” discussion into a “double rip” discussion. It’s now crystal clear that all of last year’s recession talk was well off the mark. The USA continues to be supported by a healthy budget deficit that is serving as a buffer to any downside in growth. This doesn’t mean problems don’t remain, but the bears have greatly exaggerated the weakness in the US economy.
Econoday has the details on this morning’s employment report which showed a healthy jump in private sector employment to 240K jobs in January as well as a decline in the unemployment rate to 8.3%:
“The January jobs report posted stronger than expected with payroll gains and unemployment dip. Payroll jobs in January advanced 243,000 after jumping 203,000 in December (originally 200,000) and rising 157,000 in November (prior estimate up 100,000). The net revisions for November and December were up 60,000. Analysts projected a 135,000 boost for January. Today’s report includes annual revisions to payroll series, including benchmark revisions to payroll levels and new seasonal factors. Household data received annual revisions last month but reflect updated population estimates in January data.
As for some time, private payrolls outstripped the total, increasing 257,000 in January, following a gain of 220,000 in December. Expectations were for a 150,000 rise in private payrolls. Private-sector employment was led by gains in professional and business services (+70,000), leisure and hospitality (+44,000), and manufacturing.
In the private sector, goods-producing jobs advanced 81,000 after a 71,000 boost in December. Manufacturing jobs increased 50,000 in January after rising 32,000 the month before. Construction employment gained 21,000 after increasing 31,000 in December. Mining increased 10,000, following an 8,000 advance the prior month. Private service-providing jobs jumped 176,000 in January, following a 149,000 expansion in December.
The public sector continued to shrink as government employment slipped 14,000, following a 7,000 decline in December.
Average hourly earnings rose 0.2 percent in January, following a 0.1 percent increase the prior month. The consensus called for a 0.2 percent gain. The average workweek for all workers in January held steady at 34.5 hours. Analysts projected 34.4 hours.
From the household survey, the unemployment rate dropped to 8.3 percent from 8.5 percent in December. The market median forecast was for an 8.5 percent unemployment rate.”