The widely anticipated February Unemployment Report covering the month of January was just released. Let’s dive right in and take a look at the numbers . . .
I. UNEMPLOYMENT RATE
November: 10.2%…revised to 10.1%
– February Consensus Expectation: 10.1%
– February Actual: 9.7%
Comments: A fluke. A drop in the rate would typically be viewed as a positive but then why didn’t we see job growth? Today’s report indicates that a lot of people have given up looking for work thus shrinking the overall labor pool. The U-6, that is the underemployment rate is now 16.5%. Better? Don’t be fooled. I think it is again more an indication that people are exiting the labor force overall.
II. NON-FARM PAYROLL (click here for definition of this term)
July: loss of 463k
August: loss of 304k
September: loss of 154k
October: loss of 139k
November: loss of 111k…revised to a loss of 127k jobs
December: loss of 11k…revised to a gain of 4k
January: loss of 85k
– February Consensus Expectation: 0, that is no job gain or loss
– February Actual: a loss of 20k jobs.
Comments: weaker than it appears as a lot of jobs added were temporary workers and Census workers. Revisions from prior two months was a net loss of 5k jobs.
III. AVERAGE HOURLY EARNINGS
– February Consensus Expectation: .2
– February Actual: .2%
Comments: as expected.
IV. AVERAGE HOURLY WORKWEEK
July: 33.0 hours
August: 33.1 hours
September: 33.1 hours
October: 33.0 hours
November: 33.0 hours
December: 33.2 hours
January: 33.2 hours
– February Consensus Expectation: 33.2 hours
– February Actual: 33.9 hours
Comments: this number surprises me. Are we truly seeing the increased demand drive the hours worked this much higher? Overall this is a positive in the midst of otherwise mixed to negative news.
V. FURTHER COLOR: the major piece of news within our employment situation was actually hinted at a few days ago and that is that the Dept. of Labor revised overall employment for 2009 down by 930k jobs. Were they looking through rose-colored glasses all along? Who knows? This revision is an indication our recession was even deeper than believed or, in my opinion, reported.
The cheerleaders will run out onto the field and smile for the camera, but don’t be fooled. The labor pool has shrunk and that explains the drop in the rate.
Where are the real jobs? Where is the growth? We’re still looking and waiting.
VI. MARKET REACTION
Pre (8:25am)- and Post-report (8:50am)
2yr Tsy: .80 and .80….ho hum..
10yr Tsy: 3.59% and 3.62%…ho hum…
DJIA Futures: -58 points and -7 points…slightly better
S&P 500 Futures: -6.7 and -2.2…
U.S. Dollar Index: 80.19 and 80.04..slight downtick ..