Friday, February 03, 2006

Didn't cover? 

The employment report for January registers a solid gain, but so did the previous five months, adding 151,000 new jobs not previously reported in the Bureau of Labor Statistics' annual data revision. So while some want to say 193k new jobs is less than the 250k expected, the upward revisions more than cover the difference. James Picerno notes the broad base of the expansion, even with an upbeat manufacturing sector.

Remember when Truman said he wished for a one-armed economist? That's what reading the reports on this is like. Try CNN, for instance:

The drop in unemployment was the latest sign of a tightening labor market, which
could put upward pressure on wages and prices in the months ahead.

On Wall Street, stocks fell and Treasury bond prices dipped, raising long-term yields, on the expectation that the report makes further interest rate hikes by the Federal Reserve more likely.

That's also a reaction to yesterday's productivity report, which showed a decrease in the fourth quarter. Remember, though, when people were complaining that all that productivity increase was costing the US jobs, and that it was lining the pockets of the rich? Now that productivity is falling and employment and wages rising, what are they saying?
Unemployment fell to 4.7%, largely because adults continued to quit the job market. In January the labor force shrunk just as it did in November, and the growing number of discouraged workers is a major public policy problem. The adult labor force participation has fallen significantly since George Bush took over stewardship of the economy. If adults were participating in the job market at 2000 levels, unemployment would exceed 6%.-- Peter Morici, University of Maryland

Maybe some people like leisure? I never thought the purpose of a healthy economy was to create more work; I thought play was part of a higher standard of living. (It's worth noting that long-term unemployment -- the number of workers who've looked for work more than six months -- constituted 16.3% of the unemployed versus 21% a year ago. The discouraged workers count is down as well.)

Or this, from the AP: "Despite good news on some economic matters, Americans still feel anxious about the economy, polls indicate." This is based on the second reading of the University of Michigan survey, but The Conference Board reported higher levels. Just because a sentiment reading falls 0.3 points does not translate to "feeling anxious", sorry.