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Unemployment Drops Again, to 9%, But Job Creation Far Short of Expectations

| February 4, 2011

unemployment graph january 2011

Click on the graph for larger view. (© FlaglerLive)

The national unemployment rate fell to 9 percent in January, the lowest rate in 20 months (it was 8.9 percent in April 2009), and a drop from 9.8 percent just two months ago. But job creation remains weak: just 36,000 jobs were created in December. Economists polled by the Wall Street Journal had expected 136,000 new jobs. The job-creation figures for November and December were revised upward to reflect an additional 40,000 jobs over those two months.

Bad weather, government layoffs and an economy still growing anemically for most, despite growth figures just over 3 percent for the past quarter, combined for the gloomier report than expected. Federal, state and local governments shed 14,000 jobs, while private industry added a net 50,000 jobs.

The drop in the unemployment rate was led by a reduction of 600,000 of people considered unemployed, or pulling unemployment checks, while the labor force itself was unchanged. That doesn’t mean 600,000 people found jobs, but that most of those 600,000 people have dropped out of the unemployment line for one reason or another–death, retirement, discouragement. There was a significant drop (of half a million workers) in the ranks of people working part-time, and the number of people marginally attached to the labor force (those barely looking or no longer looking) rose to 2.8 million, a 300,000 increase in the last 12 months.

The total number of Americans not in the labor force was 83.9 million a year ago. It was 86.1 million in January.

Job gains: Manufacturing added 49,000 jobs in January, retail trades added 28,000, and health care 11,000.

Job losses: Construction employment declined by 32,000, especially among nonresidential specialty trade contractors (-22,000). Construction employment may have been hurt by a string of blizzards. Transportation and warehousing employment fell by 38,000, government by 14,000, and professional and business services and temp jobs dropped by 11,000.

The average workweek for all employees on private, non-farm payrolls fell by 0.1 hour to 34.2 hours in January, the Labor Department reports. The manufacturing workweek for all employees rose by 0.1 hour to 40.5 hours, while factory overtime remained at 3.1 hours. The average workweek for production and non-supervisory employees on private non-farm payrolls declined by 0.1 hour to 33.4 hours; the workweek fell by 1.0 hour in construction, likely reflecting severe winter weather.

Average hourly earnings for all employees on private payrolls increased by 8 cents, or 0.4 percent, to $22.86. Over the past 12 months, average hourly earnings have increased by 1.9 percent. Over the last 12 months, the inflation rate has increased 1.5 percent. Average hourly earnings of private-sector production and nonsupervisory employees rose by 10 cents, or 0.5 percent, to $19.34.

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9 Responses for “Unemployment Drops Again, to 9%, But Job Creation Far Short of Expectations”

  1. DLF says:

    Now it is bad weather that caused jog not to be found, some jobs added here some lost there. The figures are good compared to this or that. The bottom line many good Americans are still out of a job while the crooks in Washington continue to fine ways to spend money. Each month the goverment finds some excuse to say that the goverment and the leaders are not doing thier jobs, but again they have one. How is change and hope working out for the people who could not find a job because of the bad weather or some other weak excuse made up by the crooks in Washington.

  2. Kyle Russell says:

    The blizzards aren’t an excuse. You literally can’t build if there are several feet of snow.

  3. PC MAN says:

    Hey DLF don’t you teabaggers argue that “gubmint” does not create jobs ? Wall Streets at 12000, record bonuses are being paid, they create jobs not “gubmint”. Ask your CEO gods for jobs please.

  4. Jack says:

    @DLF: We’ll wait with baited breath while you gather your talking points from the ‘internets’

  5. DLF says:

    Last week Time Mag. which all you liberals read had a cover story on why Obama loves Regan. Maybe he could be like Regan and produce 16 million jobs like Regan did. I wonder if it ever snowed when Regan was President.. PC man I will ask one othe CEO for a job,I never got a job from a poor person did you, or did you work,my guess a goverment job.. I wonder what the excuse will be next week, maybe because the Steelers won the Super Bowl, or because February only has 28 days. I am sure they will find some way to explain away the lack of jobs, and you liberals will fall for it.


    is 9% supposed to be a good number? what about the number of people that are no longer being recorded? anyone can make the number work anyway they want ( statistics 101) ,,,,,,,when is everyone going to stop looking to Washington for job growth?

  7. Jack says:

    Austerity schmerity, If Repubs are serious about deficit reduction they would trim an assload from the defense budget, but we won’t see that happening anytime soon. Fiscally responsible and conservative are not synonymous. And I believe Clinton created 23+/- million jobs, just sayin.

  8. Kyle Russell says:

    There was tremendous job growth under Reagan because Paul Volcker lowered interest rates after several years of keeping them at high levels to fight off inflation. Also, in order to be more like Reagan, wouldn’t Obama have to.. what was it, triple the deficit?

    • Pierre Tristam says:

      Let’s not overplay the job creation of the Reagan years: Some 5 million jobs were created in his first term, when he cut taxes, 11 million in his second, when he increased taxes (to Carter’s 10 million in his one term), still well below the nearly 23 million jobs created under Clinton, whose “massive” tax increase of 1993 was, according to the GOP of the day, going to demolish the economy.

      There’s been a pretty solid correlation going back to the dismal Coolidge-Hoover years between higher taxes and more solid job creation, for the Eco101 reason that in a more equitable economy, wealth is less concentrated, more people have more buying power, more goods and services are in demand, more jobs are created. Marginal tax rates should not be punishing. Nor should they undermine the purpose of economic policy: to broaden prosperity to the greatest number and prevent, not enable, economic darwinism (ergo, regulations). Adam Smith’s invisible hand intended markets to be free as a conduit to spreading wealth, not as a means to further concentrating it, since, when Smith was writing, the predominant economic problem was the overt and obscene concentration of wealth (inherited and inert wealth particularly) that was the equivalent of a millstone on the broader economy’s neck (which explains why the likes of Warren Buffet and Bill Gates despise inherited wealth and oppose lowering inheritance and capital gains taxes). Let’s not of course expect any discussion of capitalism’s theories to be historically or rationally minded these days, when bumper-sticker ideology is as far as our tea-stained amnesiacs are willing to go.

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