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Friday, February 4, 2011

Gallup's Job Numbers Looking Good

Today's government release of U.S. job numbers for January 2011 appear to lack simple face-validity. The establishment survey is showing just 36,000 new jobs were created in January and the household survey shows 117,000 new jobs. Even with this anemic job growth in both surveys, the government reports the U.S. unemployment rate declined to 9.0% in January from 9.4% in December. The weather, the seasonal adjustments being applied, and the number of people leaving the workforce -- 504,000 in January -- combined to produce job numbers no one can anticipate or rationalize.

In sharp contrast, Gallup's 9.8% unemployment number and 18.9% underemployment rate, not seasonally adjusted, make good sense as Slate recently noted. The job situation is not as bad as a year ago -- down about one percentage point -- but still bad.

The government also reported jobless claims plummeted by 42,000 in the week ending 1/29 after surging 51,000 during the prior week. Once again, weather and seasonal adjustments are making the government's data all but useless. On the other hand, Gallup's weekly Job Creation Index -- that parallels jobless claims -- has remained essentially unchanged over the past five weeks -- as well as the past four months. Again, not as bad as a year ago, but not improving.

Maybe it's time to pay a little less attention to what the government is reporting and a little more to what a private sector firm, like Gallup, finds in its daily monitoring of the U.S. economy.


Tim Chen said...
February 10, 2011 at 10:02 PM  

Job numbers are getting better. The report used to have big impact on the stock market, but it isn't anymore.

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