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by Frank James
The job loss numbers for January were, put simply, somewhat shocking.
Economists had expected a mediocre 70,000 increase in payrolls. Instead, January's payrolls fell by 17,000 as the Labor Department reported this morning. It was the first such job loss since 2003.
Economists generally believe the economy should add about 150,000 jobs a month just to have enough jobs for the growing workforce. So even the expected 70,000 was less than half of the jobs required. That payrolls fell by 17,000 was simply abysmal.
The decline would seem to serve as further vindication of Federal Reserve Chair Ben Bernanke. After cutting the key, federal-funds interest rate by a combined one and a quarter percentage points, in two actions since early last week, the Fed has been criticized by some for moving too aggressively and seeming almost panicky.
Some Republican members of Congress have also expressed concern that the interest-rate cuts could cause inflation to rise to troublesome levels.
But the Fed has two main tasks under federal law: maintaining price stability and keeping the economy as close to full employment as possible. With with an obviously contracting job market, at least in January, and the Fed expecting inflation pressures to moderate, the central bank has some more ammunition to use against critics.
According to the Labor Department, the job losses were fairly widespread. Employment in the construction, manufacturing and professional services were all down though health-care added jobs.
Here's part of the Labor Department report:
In January, total nonfarm payroll employment was about unchanged (-17,000), after
edging up in November (60,000) and December (82,000). In 2007, payroll employment
increased by an average of 95,000 jobs per month. Both construction and manufac-
turing employment continued to decline in January, and health care employment rose.
(See table B-1.)
Construction employment decreased by 27,000 in January and has fallen by 284,000
since its peak in September 2006. Over-the-month job losses occurred in residential
building (-10,000) and residential specialty trade contractors (-18,000).
Manufacturing lost 28,000 jobs in January. Over the month, small declines occurred
among many durable and nondurable goods industries. Manufacturing has lost 269,000
jobs over the past 12 months.
In the service-providing sector, health care employment continued to grow in
January (27,000), about in line with average monthly gains over the prior 12 months.
Within health care, over-the-month job gains occurred in ambulatory health care ser-
vices (14,000), which includes offices of physicians, and in hospitals (10,000).
Food services employment continued to trend upward in January. From November
through January, food services added an average of 16,000 jobs per month, compared
with an average gain of 28,000 jobs for the 12-month period ending in October.
Employment in professional and technical services was little changed in January
following a large increase (49,000) in the prior month. In 2007, job growth in this
sector totaled 335,000.
In January, employment in financial activities was about unchanged as commercial
banking lost 4,000 jobs, and securities, commodity contracts, and investments added
5,000 jobs. Since reaching a peak in December 2006, employment in financial activi-
ties has declined by 99,000.
In January, employment in both wholesale and retail trade was little changed.
Within retail trade, employment in food and beverage stores was up by 12,000 over
the month.
The weaker jobs reports gives Democratic presidential candidates another chance to bash President Bush for his stewardship of the economy.
It also raises the pressure on Sen. John McCain, the apparent frontrunner for the Republican nomination who has made his reputation on national security, fighting pork and campaign finance but not the economy, to come up with a more compelling argument than he's delivered so far about why he's just the right man to rescue the economy.
Comments
More proof that Ben Bernanke knows what he's doing. The last thing we need is some pseudo-conservative CEO (whose company only made a profit by cutting jobs)who has no idea what he's doing meddling with the US economy.
Posted by: Jeff | February 1, 2008 11:20 AM
Johnny D:
You have crowed about the 52 straight months of job growth. Then explain these tidbits:
"Economists generally believe the economy should add about 150,000 jobs a month just to have enough jobs for the growing workforce. So even the expected 70,000 was less than half of the jobs required"
"In January, total nonfarm payroll employment was about unchanged (-17,000), after edging up in November (60,000) and December (82,000). In 2007, payroll employment
increased by an average of 95,000 jobs per month. Both construction and manufacturing employment continued to decline in January, and health care employment rose."
So if payrolls rose an average of 95,000 a month in 2007, and the average amount of growth needed per month to handle the growing job market is 150,000, doesn't that mean that on average, the Bush economy has fallen SHORT on job growth every month by 55,000?? Which totals out to a 660,000 job SHORTFALL for all of 2007?? So where is this great job creation that you have talked about??
Posted by: BobinATL | February 1, 2008 11:35 AM
The full effect of Trickle down economics is once again smashing this country in the face full force.
We seen the effect after 12 years of Reagan/Bush 1.
Clinton came in and we (meaning everyone) enjoyed the best 8 years of economic success in our lifetime.
Why people wanted to go back to Trickle is something I'll never understand.
Well folks,you had your chance to get rid of these idiots after 4 years,even after they lied us into a war of their choice,so you'll get no pity from me.
Fool me once,shame on me,fool me twice shame on ME!!!!!!!!
Posted by: Raving Loon | February 1, 2008 12:06 PM
Bobin, your reasoning is flawed and the numbers support that. For several weeks ago, those filing for unemployment has fallen. The economy has been growing, albeit slowly in the 4th quarter, following a robust 5 percent gain in the 3rd quarter of 2007.
Frank says "economists generally believe" 150,000 jobs need to be created for a growing workforce. Yet, Mr. James never quotes any economist. When it comes to honest reporting of the facts, that is an area in which Frank James has some serious issues.
There is no doubt the economy is struggling, but we are not in a recession, not yet anyway. But you can be sure that William Neikirk and Frank James will keep writing about one until they depress everyone into thinking all is lost.
Posted by: John D | February 1, 2008 12:09 PM
It had to end sometime, Bob. 52 straight months is still pretty good, though.
Posted by: Jeff | February 1, 2008 12:17 PM
"IMMIGRATION REFOR WOES SPEAK IN AMERICA"
YA'LL TRIED BUT YOU DIDN'T DO IT, YA'LL TRIED BUT YOU DIDN'T DO IT.
CHERTOF STILL UPSET AT ALL THAT "CONGRESSIONAL CHURN" IN RELATIONS TO HIS "BORDER FENCE" HIS "BORDER SKYWATCH" DEALS GONE STRAY.
BUSH/CHENEY AND THE SATONIC POWERS THAT BE; IS MAD, MAD AS HELL BECAUSE THEIR "ECONOMIC OPPORTUNITY" IMMIGRATION PLAN FAILED AND THEY DON'T HAVE 9 MILLION MEXICANS "ATTESTING" TO PAY THEM $5,000 PER HEAD BIOMETRIC "JOHN MCCAIN IF ELECTED" TATOO.
THAT IS WHAT JOBS THIS PRESIDENT AND HIS MEN THOUGHT WOULD BE BOASTING HIS GOVERNMENT, HIS DICTORIAL BUSH WAR ECONOMICS.
SO GIVE HIM IMMUNITY OR IT'S "MY VETO" PEN TOWARDS MOVING MORE AND MORE JOBS TO HALLIBURTON IN DUBAI!
AMERICANS DON'T NEED NO STINKIN JOB, THEY NEED A BORDER FENCE AND Z PEOPLE
Posted by: Roger Morris | February 1, 2008 12:34 PM
Wait, wait a second. I understand the role of keeping prices stable. What does jobs have to do with it, though?
I think all this dancing around, trying to manipulate the economy out of its slump might just make things worse.
Posted by: Stephen Daugherty | February 1, 2008 12:48 PM
So if "economists" have no idea what happened in the immediate past (last month), why should any rational person believe what they predict for the future?
Posted by: Adam Smith | February 1, 2008 1:05 PM
"BUSH ECONOMICS SPEAKS"
GAL LI, DICK, WE DID THIS.
SURPRISE, SURPRISE, SURPRISE GEORGE, NO I DID!
Posted by: Roger Morris | February 1, 2008 1:20 PM
52 straight months is still pretty good, though.
Posted by: Jeff | February 1, 2008 12:17 PM
Depends on what kind of jobs are being created, Jeffy.
Posted by: jethro | February 1, 2008 1:49 PM
Bill Barnhart reports the following in today's Tribune: "The January count of private employment by Automatic Data Processing showed a surprising gain of 130,000, which implies a total jobs gain of 160,000. That's more than twice the average estimate of economists." How is that 130,000 gain reconciled with the 17,000 job loss in this article?
Posted by: Richard | February 1, 2008 1:50 PM
Ohio
The Columbus Dipatch reports that Gov. Strickland will cut 2,700 state gov't workers' jobs as a result of a 733M to 1.3 B shortfall in the next 17 months--due to the "souring economy". Also, two state mental hospitals will be closed.
I am glad that the Bush/Cheney families' personal economy will be healthy no matter what they have done to America. Record oil profits--no reason for that in a recession other than no regulation for the buddies, less corp. taxes going back into America due to generous tax laws for the corps. and buddies, personal greed, and no care for, or empathy for, Americans needing gas to get to work in order to live. Who will pay taxes when the middle class is gone?
Posted by: Vivian | February 1, 2008 2:14 PM
Now that the baby boomers are starting to retire, economists may want to start revising what they "generally believe".
Looking for a job? The behemoth that is Homeland Security has about 860 listed. http://www.dhs.gov/xabout/careers/
Posted by: TMB | February 1, 2008 2:24 PM
Jeff,
It would have been good if every segment of the populace benefited, which it didn't. It would have been good if it could have been accomplished without adding three trillion dollars in debt, which it didn't. In other words, it was a miserable failure and further proof that Republicans can't govern.
Posted by: dt | February 1, 2008 2:53 PM
"NO JOBS IS LIKE NO NEWS IS GOOD NEWS FOR THE BUSH ADMINISTRATION"
YA'LL NEED ME, "I'M YO DADDY" "I'M BIG POPPY IN AFGANISTAN"
GIVE ME IMMUNITY AND I WILL GIVE YOU JOBS. GIVE MY AT&T / VERIZON WIRELESS IMMUNITY AND THEY WILL GIVE YOU JOBS.
SIGN MY IMMIGRATION BILL THAT ALLOWS ME TO CONSOLIDATE THE REST OF THE TREASURY AND SOCIAL SECURITY SECRETARIES UNTO HIM, "CHERTOFF" AND WE WILL GIVE YOU BORDER JOBS, PRISON FOR PROFIT JOBS, BIOMETRIC TESTING JOBS, FORENSIC DNA TESTING JOBS, DETENTION, RENDENTION BORDER JOBS.
DON' YA'LL SEE THE "ECONOMIC OPPORTUNITY" THAT WE LOST WHEN WE DIDN'T SIGN ALL NATIONALITIES AND NATURALIZATIONS OVER TO MY GOVERNMENT AND MY "SECRETARY CHERTOFF".
BILLIONS AND BILLIONS OF DOLLARS FACTORED IN MY BUSH ECONOMIC WAVE OF THE FUTURE LOST. ALL BECAUSE OF THOSE DOG GONE DEMOCRATS AND THEIR ON GOING INVESTIGATIONS.
SORRY DON'T GET ME STARTED.
SO WHOMEVER THINKS 130,000 JOBS WERE CREATED ARE "CRACK HEADS" LOOKING AT THE GEEK SQUADS ERASED PRESIDENTIAL RECORDS AND JUST CAN'T BELIEVE THE CRIMES COMMITTED.
Posted by: Roger Morris | February 1, 2008 3:32 PM
Chimpy and the Repukes do not care if we lost 17,000 jobs last month.
They're all rich scumbags.
"Let them eat cake" is what they're saying.
Vote Repuke if you want more of the same.
Posted by: Tom3 | February 1, 2008 3:49 PM
When looking at the monthly jobs data from the BLS, one must remember that it is created by formulas, not actual job counts.
The worst of the formulas is the birth/death ratio used to account for new businesses and those going out of business. It uses numbers from 2 years ago. So in a growing economy it understates job growth and in a declining economy it overstates job growth. So the actual job losses are likely greater than what has been reported.
The unemployment number is an actual survey done by BLS. It is more accurate but for this month is hard to reconcile with the unemployment claims data from Thursday.
Also, financial firms are cutting tens of thousands of jobs but the financial sector shows banking as losing only 4,000 jobs.
The difference between the ADP #'s and the Fed is that they count only private sector jobs and can only go by what they process payrolls for which is none of the really large firms.
Posted by: Bobert | February 1, 2008 6:00 PM
Economies run in cycles. We are still in an 6-plus year economic growth - pretty good.
Unemployment around 5% - pretty darn good.
Since the 1981-82 recession, we have two recessions in the past 25 years.
Supply-side economics works by putting money into the hands of people that create jobs.
One president in that time sat in the oval office during the explosion of personal computers and the internet and his economic legacy has benfitted from that and not the policies he instituted.
Do any of you Kenseyians want to explain how higher taxes leads to economic growth?
Posted by: Terry | February 1, 2008 7:59 PM
If you want some sticker shock, look at your 401K totals. The Pyramid scheme is collapsing.
But don't worry; somebody is getting rich of you.
Just keep repeating; Enlarged Prostate Economics is working...
Posted by: C.Morris | February 1, 2008 8:02 PM
"There is no doubt the economy is struggling, but we are not in a recession, not yet anyway. But you can be sure that William Neikirk and Frank James will keep writing about one until they depress everyone into thinking all is lost."
John D,
You are brave to defend a failing economy. I have to give you credit for sticking your neck out like that! The problem is that this is the first of its kind: global recession.
We can formulate responses to economic conditions that have similiar patterns to the past. . .but global recession? It's a different animal and beast. Japan's prime rate is at %0.5 percent. That's virtually giving free money to the banks, and their economy is still faltering right ahead and behind us. The rest of the world's economy is sinking along the Titanic Ship of Prime Loans. This is unheard of!
The question is not whether we are in a recession. The question is how many lifeboats do we have on this Titanic? And, who will we have to be leave behind? I suspect it's the usual: the poor, the misfortune, and the lower class. :-)
Posted by: Lou | February 1, 2008 11:02 PM
Do you think in Bush's last year as the president they will start reporting the REAL numbers? Did anyone really believe what we were told over the past seven years about unemployment and the state of the economy?
Posted by: lochnessmonster | February 2, 2008 6:54 AM
CM,
I'll take my 401K over 40 years as compared the miniscule returns from SocSec any day.
Anyway, isn't a slowing economy what you global warming fanatics want anyhow?
http://blogs.abcnews.com/politicalpunch/2008/01/bill-we-just-ha.html
Posted by: Terry | February 2, 2008 8:29 AM
Lochness,
If you have proof of these "real" numbers, please provide proof. Otherwise, you sound as ridiculous as Rosie O'Donnell and 9-11 being an inside job.
Posted by: Terry | February 2, 2008 12:16 PM
02/13/2008
Manufacturing is being attacked in America by our Leaders who refuse to lead.
Lee Iacocca's book, "Where Have All The Leaders Gone?" is evidence how the Media is trying to crush the word from getting out! No one is talking about this book. No one had talked much about the 1989 Maryann Keller's Book--The Rude Awakening, The Rise, Fall, and Struggle for Recovery of General Motors. In 1995, at the Governor's Conference of Quality, Fife Symington, many executives sat questionless after a one hour speech presented by a caring Fellow Executive on how to make improvements in quality around your business, during the speech I pointed out no one will make a comment to the President of Adapto, Inc.-and I was right, not one executive cared to ask a question [like they knew all the answers]. What a rigged game! No wonder why the young are staying far away from this industry!
And our leaders are cashing in big time. After seeing how Lee Iacocca got used in Graz, Austria [Eurostar] to pull up the roots of a hundred year old company [right next door], even he declines to mention that in his 2007 book. Why is the Businessman in America suppose to be happy with 2%, when our International Businessman is getting 700%, and coming back home to terrorize the remainder of the Independent Companies and consume the Start-up Companies for lunch? Over in California the Chamber of Commerce [International] is telling politicians exactly what to do—with no responsibility for their action. In Arizona this “Chamber” and my “congressman” is fighting to keep illegals in the country [see Lou Dobbs interview 1/16/2008 with Glen Ham(m)er] totally against the Grain of the American/Arizona People. What a Free Country—no wonder by GM is becoming obsolete! Just a message from someone who cares about real Manufacturing in a Free Country! kargforcongress@cox.net Donation are welcomed!
Posted by: Don Karg | February 13, 2008 3:59 PM