And here is the reason I feel that the above report is a bunch of bullshitNEW YORK (CNNMoney.com) -- The government's monthly job report on Friday showed that the disastrous labor situation plaguing the nation's economy is moderating. But the report also underlines an unsettling reality: 8.4 million jobs have been vaporized since the recession began, and digging out won't be easy.
The unemployment rate fell unexpectedly in January to 9.7%. And businesses shed 20,000 jobs for the month, far fewer than the 150,000 jobs that were lost in December.
But, at the same time, the Labor Department revised its previous estimates for the number of jobs that have been lost over the past 25 months. What they found wasn't pretty.
Since the recession began in December 2007, the economy has lost 1.4 million more jobs than previously believed. The adjustments also showed losses for 2009 alone came to 4.8 million jobs, more than 600,000 additional lost jobs than previously estimated.
"We're coming out of a very, very steep downturn," said Dean Baker, co-director of the Center for Economic and Policy Research. "The revisions show that we have a really big hole to come out of."
The revision came about because the government had been dramatically underestimating the number of businesses that were closing due to the recession.
Signs of improvement, but steep hill to climb
Economists estimate that the country needs to create at least 125,000 jobs per month just to keep up with the nation's expanding job force. That's why the downward revisions of past job losses are a stark reminder of how much the economy needs to turn around. There are now 14.8 million unemployed Americans, who have been jobless for an average of 30 weeks -- an all-time high.
"Even as today's numbers contain signs of the beginning of recovery, they are also a reminder of how far we still have to go to return the economy to robust health and full employment," said White House economist Christina Romer in a statement.
"It is important not to read too much into any one monthly report, positive or negative," she added. "It is essential that we continue our efforts to move in the right direction and replace job losses with robust job gains."
There were signs in January's report that the worst of the labor decline is largely over, and many businesses are beginning to hire again.
The manufacturing industry created 11,000 jobs last month, and the services industry was the biggest jobs creator, with a net gain of 48,000 jobs. Of those services gains, 42,100 came from the retail sector, suggesting businesses are hopeful that the recent growth in consumer spending wasn't a fluke.
Perhaps the most encouraging sign from January's report was that 44,000 jobs were created in the business services industry, which includes administrators and temporary workers. Economists see professional services as a proxy for overall economic activity, and many employers hire temporary workers before signing on new full-time staff.
Employers also largely hire workers that were reduced to part-time positions for full-time work before they hire new employees. That trend appeared to be in play in January, as the so-called under-employment rate fell to 16.5% last month from from 17.3% in December. The under-employment rate measures the percentage of Americans who were unable to find jobs with the amount of hours they want to work, as well as those without jobs who have become discouraged and stopped looking for work.
Workers were also working longer hours: The hourly work week rose by an average of 6 minutes to 33.9 hours in January. With a modest 4-cent gain in the average hourly salary, the average weekly paycheck rose by $1.36 to $761.06.
Employers still cautious
Still, it wasn't all good news. Several sectors continued to shed jobs, including the hard-hit construction industry, which shed another 75,000 jobs in January. The transportation and financial industries also lost in excess of 10,000 jobs, and the government shed a net 8,000 positions in January.
"Employers are still very cautious about hiring people and adding to their payrolls on a permanent basis," said Joanie Ruge, senior vice president at outsourcing firm Adecco Group North America, a unit of the world's largest employment staffing firm. "Many companies are looking to make sure they don't aggressively add staff -- and then the economic turnaround doesn't last, and they're force to lay off again."
Economists were cautious in their optimism as well. Though the unemployment rate fell to 9.7% from 10%, economists were skeptical that a month of job loss could muster such a large decline in the jobless rate.
Many experts chalked up the decline to the recent round of revisions impacting the estimated number of people in the workforce.
"January's rate showed an exaggerated sense of improvement in labor market," said Mark Vitner, economist at Wells Fargo. "But there is improvement. I don't want to take that away."
Looking at the U-6 numbers there was some good news with the US going from 17.4 to 16.5 so there was some changes at the baseline, but the second report makes me believe that whatever numbers we get out of this administration are going to fudged as hell.Poof: Another 800,000 jobs disappear
NEW YORK (CNNMoney.com) -- As bad as the government's jobs readings numbers have been during the Great Recession, we'll soon find out the real situation likely was worse.
Much worse.
Job losses during the recession may have been underestimated by close to a million jobs. So instead of employers cutting just over 7 million jobs from their payrolls since the economic downturn began in December 2007, it's expected that the Labor Department's new estimate will be a loss of 8 million jobs.
"It's an enormous understatement of the severity of the crisis," said Heidi Shierholz, labor economist with the Economic Policy Institute, a union-supported think tank. "It confirms that things were actually worse on the ground than what the reports suggested."
The new reading will come when the economists at the department's Bureau of Labor Statistics release their annual revision of U.S. payrolls from April 2008 through March of 2009 Friday, using data that wasn't available as the monthly readings were being estimated and reported.
Typically the revision results in only a slight change in the previous estimate -- about 0.1% to 0.2% of the total number of jobs. But there was nothing typical about the twelve month stretch that ended last March.
That period included the bankruptcy of Lehman Brothers, the seizing up of financial markets and the U.S. economy toppling close to the brink of another depression.
Battle brews over hourly jobs
The government's current readings show that 4.8 million jobs were lost in those twelve months, more than twice the jobs lost during any comparable April-March period going back to 1939, when the numbers first started to be compiled.
But the department has already given a preliminary look at this Friday's revision, and it says it believes it will show 824,000 fewer workers on payrolls than the current estimates. That would be the biggest downward revision in the 30 years for which comparisons of those adjustments is possible.
"There's certainly a disconnect between economists like myself who say the recession ended in May or June and the person on the street who says the recession hasn't ended," said John Canally, economist LPL Financial. "This report is only going to widen that gap."
Canally said the big revision is one reason that it's difficult to estimate what Friday's report will show about the labor market in January, or how investors will react to the report.
Economists surveyed by Briefing.com are forecasting a net gain of 13,000 jobs in January, following a loss of 85,000 jobs in December. The unemployment rate is expected to remain at 10%.
Economists say it shouldn't be a surprise that there is such a big revision this time, given the severity of the economic downturn.
"Most of the time it's reasonably accurate. But when there are very sharp changes in the economy, they tend to miss and it becomes a big problem," said Dean Baker, co-director of the Center for Economic and Policy Research.
The problem is that BLS models appear to have grossly overestimated the number of new businesses that opened during the recession.
The payroll number is created through a monthly survey of employers, but that survey misses employers who start a business during the course of the year, as well as those who have gone out of business.
So every month BLS uses what is known as a birth-death adjustment to estimate the number of jobs created or lost from that turnover in business.
During the April 2008-March 2009 period, that adjustment added jobs to the overall payroll number in 11 of the 12 months, resulting in a net gain of 717,000 jobs.
"When the numbers were coming out, the idea that we had a significant number of businesses being created didn't make sense," said Baker.
There is a concern that this problem didn't end in March of 2009. In fact, the adjustment added even more jobs -- 990,000 -- in the nine months reported since then.
So another big revision in the payroll numbers could be looming a year from now. That means this Friday's report should give pause to anyone who is depending on the official numbers to signal real improvement in the economy.
"The numbers might be showing some pick-up in hiring, but I haven't seen much evidence of it," said Mark Vitner, senior economist with Wells Fargo Securities
But seriously folks, 800,000 jobs off, 14% off the actual and somehow this isn't a big deal? Where is the transparency, fuck, where is the competence?
