Summaries of jobs report

[ProSense]

Calculated Risk

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This was a decent report with two obvious exceptions: the few payroll jobs added, and the slight decline in the average workweek - both potentially weather related.

The best news was the decline in the unemployment rate to 9.0% from 9.4% in December. However this was partially because the participation rate declined to 64.2% - a new cycle low, and the lowest level since the early '80s. Note: This is the percentage of the working age population in the labor force (here is the graph in the galleries of the participation rate). The participation rate has now fallen 2 percentage points during the recession - a huge decline.

The 36,000 payroll jobs added was far below expectations of 150,000 jobs, however this was probably impacted by bad weather during the survey reference period. If so, there should be a strong bounce back in the February report.

The decreases for the long term unemployed, and for the number of part time workers for economic reasons, are good news - although both levels are still very high. The average workweek declined slightly to 34.2 hours (possibly weather related), and average hourly earnings ticked up 8 cents.

If we blame it on the weather, this was a solid report. And we will know about payrolls in February.

Today’s report gives a messy picture, but when you look beyond the messiness — bad weather, questions about survey methodology — I think the picture is much clearer. The job market has not improved much if at all over the past six months. There’s some chance it may be just starting to improve, yet it’s hard to be confident about that.

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Whatever the reasons, the recovery, at least in the job market, has essentially stalled over the past nine months. Both Labor Department surveys of employment — the one of households and the one of businesses — show little change in employment since May 2010. The population has continued to grow over that time, so little change in employment means that the job market has deteriorated.

There are some reasons to think the situation is starting to improve again. Businesses are profitable, stock prices are rising and consumer spending has picked up. As my colleague Floyd Norris notes, a lot of other economic indicators — including some that track the job market in other ways, like initial jobless claims — look better than the monthly employment reports have.

The most hopeful story holds that the job market did indeed pick up in December and would have continued doing so in January were it not for all the winter storms. Joshua Shapiro, an economist at the research firm MFR in New York, suggests that bad weather cost the economy more than 100,000 jobs last month. Those jobs will come back next month, and Mr. Shapiro — who has been notably sober-minded about the strength of the recovery — expects a job gain of more than 300,000 in next month’s report, up from just 36,000 this month.

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