Friday, February 7, 2014

It's The Economy Stupid: Payrolls & Earnings

Payrolls in U.S. Rise Less Than Forecast; Jobless Rate Falls As More People Look For Jobs

 

Economic Event

Period

Economic Survey

Actual Reported

Original Prior

Revised Prior

Change in Nonfarm Payrolls

Jan

180K

113K

74K

75K

Two-Month Payroll Net Revision

Jan

--

34K

--

--

Change in Private Payrolls

Jan

185K

142K

87K

89K

Change in Manufact. Payrolls

Jan

10K

21K

9K

8K

Unemployment Rate

Jan

6.7%

6.6%

6.7%

--

Average Hourly Earnings MoM

Jan

0.2%

0.2%

0.1%

0.0%

Average Hourly Earnings YoY

Jan

1.8%

1.9%

1.8%

1.9%

Average Weekly Hours All Employees

Jan

34.4

34.4

34.4

--

Change in Household Employment

Jan

--

638

143

--

Underemployment Rate

Jan

--

12.7%

13.1%

--

Labor Force Participation Rate

Jan

--

63.0%

62.8%

--

 

Payrolls rose less than projected in January as retailers cut back after the holidays and government hiring fell. The unemployment rate unexpectedly declined to 6.6 percent.  You have to remember that the unemployment rate is derived from a separate Labor Department survey of households, it is not tied to the payrolls tally.  I guess the good news is that the unemployment rate dropped to the lowest level since October 2008 even as more Americans entered the labor force looking for jobs.  The Labor Force Participation Rate increased to 63.0% from 62.8%.

 

The Nonfarm Payroll number was 113,000 gain in employment followed a revised 75,000 increase the prior month.  But the median forecast of economists in a Bloomberg survey called for a 180,000 advance. The unemployment rate dropped to the lowest level since October 2008 even as more Americans entered the labor force. 

 

Retailers and government agencies cut payrolls by the most in more than a year, while construction firms and manufacturers boosted employment. Broad-based improvement in job growth is needed to help generate bigger wage gains and spur the consumer spending that accounts for almost 70 percent of the economy.

 

Today’s report showed 262,000 Americans were not at work because of inclement weather in January, little changed from the same month last year, suggesting conditions played a more limited role than in December. In the Jan. 10 release of the prior month’s data, the Labor Department had said poor weather kept 273,000 people from work, the most for any December since 1977.

 

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Life is good!  The alternative?  Not so much.

 

John Broussard

Assistant State Treasurer

Chief Investment Officer

State of Louisiana

Department of the Treasury

225-342-0013

jbroussard@treasury.state.la.us

 

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