A Big Upgrade for America's Jobs Market

The Bureau of Labor Statistics released the December jobs report Friday. For once, the news was uniformly good.

The economy added 200,000 jobs in December -- a figure made up by 212,000 jobs created in the private sector and 12,000 jobs lost on the government side. The unemployment rate fell to 8.5%, and is now down sharply and consistently from when the recession officially ended in the summer of 2009.

Source: Bureau of Labor Statistics.

A broader measure of unemployment that includes those who have given up looking for work fell as well, dropping by 371,000 to 15.2% -- the lowest level in nearly three years. For the first time in a while, the traditional unemployment rate fell mainly because jobs were being created, not because people were dropping out of the labor force (although the size of the labor force still in fact fell for the month).

This is great news. When the unemployment rate fell in October and November, some worried it was a statistical blip bound to inch higher again. After December's jobs report, that doesn't look to be the case. In fact, job creation over the last couple of months has been revised higher in a fairly big way. In August, we were originally told a net zero jobs were created for the month. Turns out it was a gain of more than 100,000. September's jobs number was originally reported at 103,000. It was later revised up to more than double that amount.

In total, 1.6 million jobs were created last year -- the most since 2006, and the fourth-highest year of the last decade. From 2001 through 2008, the economy lost a net 3.2 million jobs. Since 2010, it has gained 2.6 million. Last month was actually the best December jobs report since 1999, and the 10th-best of the last 30 years.

Those who already have jobs are doing better as well. The average number of hours worked rose by a tenth of an hour to 34.4 hours per week in December. Average pay rose, too, up 0.2% to $23.24 an hour. If you have a job, you're working longer hours for higher pay -- exactly the conditions that need to exist before employers are tempted to hire more workers.

And jobs are sprouting up in a wide range of industries. Since bottoming in 2009, the manufacturing sector has gained more than 300,000 jobs. Almost 1 million health-care jobs have been added since 2009. Nearly 300,000 hospitality jobs were added last year alone. Even construction jobs, ravaged ruthlessly during the recession, saw a slight rebound last year. In October, Ford (NYSE: F  ) reportedly struck plans to hire more than 12,000 workers this year. Google's (Nasdaq: GOOG  ) head count rose by 7,000 in the year ended Sept. 30. Even General Motors (NYSE: GM  ) , a poster boy of American job losses, added several thousand American jobs last year.

These numbers might scare off fears that we're heading back into recession. Still, take them with the appropriate grain of salt. The job market has seen several temporary spikes of hope over the last three years that fizzled out within months. The latest jump may be no different.

More importantly, the recent gains pale in comparison to the losses suffered during the recession. The economy needs to add about 150,000 jobs a month just to keep up with population growth, so last month's gain reduced the ranks of the unemployed by maybe 50,000, compared with more than 8 million jobs lost during the financial crisis. At December's rate of gain, the economy wouldn't return to prerecession job levels until the early 2020s. At double last month's gain -- equivalent to the growth seen in the late 1990s -- it would be another two years before victory over the recession could be declared.

This is our new, somewhat ironic reality: Jobs growth right now is fairly normal and healthy. It just feels bad because we're coming off such a miserable decline. We need spectacular, above-average jobs growth just to feel normal these days. And so far, we're not getting it.

Where do you think the jobs market is heading next? Share your outlook in the Motley poll below. And if you haven't already, check out my e-book, Everyone Believes it; Most Will be Wrong, on Amazon for your Kindle or iPad.

Fool contributor Morgan Housel doesn't own shares in any of the companies mentioned in this article. Follow him on Twitter @TMFHousel. The Motley Fool owns shares of Ford Motor and Google. Motley Fool newsletter services have recommended buying shares of Ford Motor, General Motors, and Google. Motley Fool newsletter services have also recommended creating a synthetic long position in Ford Motor. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (48) | Recommend This Article (31)

Comments from our Foolish Readers

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  • Report this Comment On January 09, 2012, at 4:36 PM, DJDynamicNC wrote:

    "From 2001 through 2008, the economy lost a net 3.2 million jobs. Since 2010, it has gained 2.6 million. Last month was actually the best December jobs report since 1999, and the 10th-best of the last 30 years."

    I just think that bears repeating.

  • Report this Comment On January 09, 2012, at 5:12 PM, Hukleberry wrote:

    Funny numbers out of the White House. I mean where are the jobs? They can report all of the positive spin they want but when we go looking for work, its not there. Arn't November and December big retail months for hiring along with transportation hiring? Lets see what February and March bring.

  • Report this Comment On January 09, 2012, at 5:15 PM, TMFHousel wrote:

    ^ ADP's (private payroll company) jobs numbers have actually been far more positive than the BLS figures.

  • Report this Comment On January 09, 2012, at 5:21 PM, TMFHousel wrote:

    <<Arn't November and December big retail months for hiring along with transportation hiring?>>

    Yes, but the numbers are seasonally adjusted to reflect those skews. And it's a smaller impact than you might assume: many seasonal workers are laid off in late December.

  • Report this Comment On January 09, 2012, at 5:30 PM, xetn wrote:

    I believe these indicators are far more reliable than what the "official numbers" reflect.

    For what its worth, these stats have been consistently accurate for many years. Exactly opposite to the government's.

    http://www.shadowstats.com/alternate_data/unemployment-chart...

  • Report this Comment On January 09, 2012, at 5:32 PM, TMFHousel wrote:

    <<For what its worth, these stats have been consistently accurate for many years.>>

    Based on what? How do you you know they've been accurate?

  • Report this Comment On January 09, 2012, at 5:52 PM, talan123 wrote:

    I prefer to look at the population to employment ratio which just counts people with jobs instead of trying to count people without jobs which has turned into a political monster.

    That number population to employment ratio is at 58.5% and is unchanged. The average before the great recession was 64.0%.

    It means that there is nothing going on from the employment aspect of it.

  • Report this Comment On January 09, 2012, at 6:00 PM, Kirk42 wrote:

    Talan123, where are your number from? can you cite the source?

  • Report this Comment On January 09, 2012, at 6:14 PM, mDuo13 wrote:

    Anecdotal evidence supports the idea that unemployment is slowly -- slowly -- improving, from my perspective.

    Seems like a real slow, painful recovery remains the most likely prediction. But hey, at least it's getting better, right?

  • Report this Comment On January 09, 2012, at 7:03 PM, vidar712 wrote:

    You can't find any job openings because they have been filled. The number are for employees hired, not open positions.

  • Report this Comment On January 09, 2012, at 7:05 PM, seattle1115 wrote:

    @xetn: "I believe these indicators are far more reliable than what the 'official numbers' reflect."

    I notice that "John Williams' Shadow Government Statistics" gives no hint whatsoever as to what methodology it employs in calculating its "SGS-estimated long-term discouraged workers." That seems like an unfortunate oversight.

  • Report this Comment On January 09, 2012, at 7:16 PM, Bert31 wrote:

    More Obama cheerleading

  • Report this Comment On January 09, 2012, at 8:19 PM, Merton123 wrote:

    We are entering into an election year. Keynes stimulus while delayed appears to be coming through. I am an Obama supporter so this kind of news makes me very happy. Buy Wellpoint stock !!!!!

  • Report this Comment On January 10, 2012, at 12:13 AM, maiday2000 wrote:

    Great, we have packed on about $5 trillion in additional debt the past 3 years and we still have an 8.5% unemployment rate.

    The one inconvenient fact that is ignored above is that the labor force participation rate today is 64%, versus 66% three years ago. If the same number of people were looking for work today as three years ago, the unemployment rate would be over 10%, hardly worth crowing about.

    Still, it is good that the economy is creating jobs. It's just not all that many considering how severe the recession was and how much money we borrowed trying to fix it.

  • Report this Comment On January 10, 2012, at 2:14 AM, seattle1115 wrote:

    @maiday2000: "The one inconvenient fact that is ignored above is that the labor force participation rate today is 64%, versus 66% three years ago. If the same number of people were looking for work today as three years ago, the unemployment rate would be over 10%, hardly worth crowing about."

    First of all, you're arguing a counterfactual, which is usually a red flag (or, perhaps, a red herring). Second, surely it doesn't surprise you that the percentage of the population that is retired is growing as more and more Boomers get their AARP welcome kit in the mail each year? Frankly, I would think it inexplicable if the labor force participation rate wasn't plummeting!

  • Report this Comment On January 10, 2012, at 3:43 AM, JackCaps wrote:

    Unemployment below 9%, wow! Let's all sign "Happy Days Are Here Again", shall we? Or, you may want to look at some other graphs before you get too giddy. Google "total nonfarm employment graph", you'll see that the current U.S. workforce count is still below the level that it was it in 2005. The U.S. has grown in population since 2005, it just that fewer are working.

    Ready for more? Google "average duration unemployment graph" and you'll see that the U.S. the average unemployment duration has spiked up recently to over 40 weeks. As a comparison, no post-depression era recession went over 23 weeks for the average unemployment duration.

    "Jobs growth right now is fairly normal and healthy"; really? Is that hooch in your tippy cup?

  • Report this Comment On January 10, 2012, at 8:51 AM, actuary99 wrote:

    Thanks commenters for eagerly trying to point out we are and will forever remain totally screwed, and that any thought to the contrary can only come from a little girl in princess fairy tail land.

    I find it hard to believe anyone enjoys your company in real life.

  • Report this Comment On January 10, 2012, at 9:45 AM, TMFHousel wrote:

    <<"Jobs growth right now is fairly normal and healthy"; really? Is that hooch in your tippy cup?>>

    Please read the sentence after that: "It just feels bad because we're coming off such a miserable decline. We need spectacular, above-average jobs growth just to feel normal these days. And so far, we're not getting it."

  • Report this Comment On January 10, 2012, at 9:59 AM, rclaussen wrote:

    Huckleberry wrote:

    “Funny numbers out of the White House. I mean where are the jobs? They can report all of the positive spin they want but when we go looking for work, its not there.”

    First, many comments are critical of the Bureau of Labor Statistics numbers and methods. For those who are critical, perhaps they could make suggestions on how to improve the accuracy. In other words, be a part of the solution rather than simply saying the solution is wrong.

    Second, use multiple sources of information to draw a more complete picture. Xetn identified the Shadow Government Statistics (http://www.shadowstats.com/alternate_data/unemployment-chart... ) as an alternative source. If you look at the chart presented, the only difference between what Mr. Williams presents and the BLS data is the percentage – the trend is the same. Other sources are the Challenger, Gray & Christmas Job Cut Report (and additional reports) (http://challengeratwork.wordpress.com/category/reports/job-c... ), the AAR Rail Time Indicators Report (http://www.aar.org/NewsAndEvents/Rail-Time-Indicators.aspx ), Bob Johnson provides weekly analysis of Jobs and the Economy on Morningstar – usually Thursday, Friday and Saturday (http://www.morningstar.com ).

    Third, those who are concerned about the ability to produce enough jobs for a growing United States may wish to study Demographics. A quick Google search obtained this interesting article from the Smithsonian magazine, August 2010 - The Changing Demographics of America (http://www.smithsonianmag.com/specialsections/40th-anniversa... ).

    As investors, we learn to examine the companies in which we decide to become owners from multiple points of view. Examining the article and reading the comments is no different. Establishing an opinion is hopefully guided by the creation of a strong foundation upon which your opinion is based. That strong foundation comes from a willingness to ask the eternal question of a young child – “Why?” and then seek the answer.

    Thanks,

    Bob

  • Report this Comment On January 10, 2012, at 12:39 PM, terryongarland wrote:

    The boomers retiring and shrinking the labor force, will also have a negative effect on spending ,hence lower GDP, and lower jobs growth.

  • Report this Comment On January 10, 2012, at 12:43 PM, TMFHousel wrote:

    Another factor in shrinking laborforce: Rising # of college students.

  • Report this Comment On January 10, 2012, at 1:36 PM, DJDynamicNC wrote:

    If the aging of America is a concern, it seems to me that liberalizing immigration laws would directly address that concern.

    I feel that if people wish to come to America and trade labour for money, we should encourage that or at least allow it.

  • Report this Comment On January 12, 2012, at 10:10 AM, rhutmacher wrote:

    actuary99... hilarious

  • Report this Comment On January 12, 2012, at 1:43 PM, moneytrail wrote:

    Please don't let the personal politics of MF’s analysts show through in their financial writings, as does Mr. Housel in his article, above. It trashes your credibility as an investment/financial advisory service. Is Mr. Housel suffering from “short term memory deficit disorder?” Has he forgotten we have just gone through the most active retail and part-time hiring cycle of the year: Christmas Shopping Season?

    BLS has changed its employment computation algorithms since Obama took office. Among many other distortations now incorporated into the numbers, seasonally driven employment number jumps are no longer properly adjusted before inclusion into the Bureau’s published figures. Hence, although it is obvious to the most casual observer of our economy that the recent burst of “new jobs” is primarily from the Christmas shopping season and the reduction of the work force, arising from the millions of people who have stopped looking for jobs since ’09 because there are too few jobs and because of the 2 year, unemployment gravy train, Housel expounds the alleged rapid expansion of jobs in our moribund economy. To visually support this premise, a graph is included, depicting a steady improvement in employment by conveniently excluding the fact that at the time of Obama’s inauguration, January ’09, unemployment was 7.6%, and has since soared, despite the addition of $5 trillion to our oppressive national debt burden, since then.

    Also, it seems to have been conveniently overlooked by Obama apologists that the US labor force has shrunk by least 2 million workers since the President took office, despite the fact that the US population has grown by more than 10 million, with millions new job seekers unable to find work. If adjusted for the fewer number of people looking for jobs today than were looking in January, 2009, the BLS unemployment rate would be above 11%. If one includes those who have abandoned their job search and those working part time, or otherwise underemployed, the number is approaching 18%! Sadly, in most inner cities the unemployment rate is upwards of 25% to as high as 40% among those between 18 and 30 years of age.

    With the incorporation of these considerations into Mr. Housel’s political article, is it any surprise last week’s, first time unemployment claims have soared to 399,000, according to today's report? Please, conform your financial analyses to economic facts, not political hopes. It doesn’t take an economic wizard to peg the dire straits of our economy, no more than it takes a climatologist to tell you it’s raining outside: just stick you head out the window – it still pretty gray and dark out there!

  • Report this Comment On January 12, 2012, at 1:48 PM, TMFHousel wrote:

    <<Please don't let the personal politics of MF’s analysts show through in their financial writings, as does Mr. Housel in his article, above ... Has he forgotten we have just gone through the most active retail and part-time hiring cycle of the year: Christmas Shopping Season?>>

    There's nothing political about the article, and the numbers are seasonally adjusted to smooth out skews from holiday hiring.

  • Report this Comment On January 12, 2012, at 2:13 PM, DJDynamicNC wrote:

    -->"Has he forgotten we have just gone through the most active retail and part-time hiring cycle of the year: Christmas Shopping Season?" <--

    "Figures seasonally adjusted." That's not a meaningless phrase.

    --> "Sadly, in most inner cities the unemployment rate is upwards of 25% to as high as 40% among those between 18 and 30 years of age" <--

    Source please?

    I find that when conservatives say "urban" or "inner cities" they picture some foreign, darker-skinned land where everything is bad all the time and not like "real America", so you'll have to pardon my skepticism about your claims.

    "Inner city" is a particularly telling term; an economist would use a term like "Central Business District." You know, the places where average office vacancies have been falling for the past several quarters as businesses expand?

  • Report this Comment On January 12, 2012, at 2:28 PM, moneytrail wrote:

    Labeling others as "conservative" or implying "color motives" to an analytical article is so much easier than addressing the issues presented.

    As far as sources for well know

  • Report this Comment On January 12, 2012, at 2:29 PM, moneytrail wrote:

    Dear DJ:

    Labeling others as "conservative" or implying "color motives" to an analytical article is so much easier than addressing the issues presented. Please stick with the issues presented, since you know nothing about me personally; neither political views, race nor place of domicile.

    As far as sources for well known information presented in my analysis, such as inner city unemployment and the concern over BLS’s alteration of its statistical models; I invite you to explore the wealth of information at the fingertips that enabled you to create your “fast response” email.

  • Report this Comment On January 12, 2012, at 2:56 PM, moneytrail wrote:

    Mr. Housel:

    Thank you for your response.

    I do not know if your article was intentionally, politically biased. I am simply pointing out what other Fools, in addition to me, have observed.

    For example, the graph included in your article shows February, ’09 unemployment at 9.5%, when it was actually 7.6%. The 9.5% number shows a more pleasing unemployment curve than does the actual, 7.5%. Perhaps this was unintentional on your part but, nevertheless, it is a curious miscue.

    The BLS’s numbers, seasonal adjustments included, have been under increasing criticism because of changes in the Bureau’s computation models over the past 3 years. Suspicions are raised further by the precipitous 0.5% drop in reported unemployment numbers beginning in October, in precise alignment with the accelerated hiring that occurs every year at this time, due to the Christmas Holiday.

    Can this be attributed to coincidence; perhaps, but not likely. It appears to be more along the lines of misreporting by BLS, as further corroborated by last week’s substantial jump in new unemployment claims to almost 400,000 which I suspect is the beginning of a trend re-establishing the “real” unemployment rate to where it was before the October “surprise.”

    Sincerely,

    Moneytrail.

  • Report this Comment On January 12, 2012, at 3:07 PM, DJDynamicNC wrote:

    Moneytrail, 1:43 PM: "Please don't let the personal politics of MF’s analysts show through in their financial writings, as does Mr. Housel in his article, above. It trashes your credibility as an investment/financial advisory service."

    Moneytrail, less than an hour later: "Labeling others as "conservative" or implying "color motives" to an analytical article is so much easier than addressing the issues presented"

    Just so I'm clear, you are calling me out for labelling your politics in an analytical article, which I did in response to... your labelling Morgan's politics in an analytical article.

    I have two questions for you:

    1) Was I wrong in calling you a conservative?

    2) Why is it legitimate for you to do so, and not for me?

    I am genuinely curious here.

    Oh, and the "you google it" response is a dodge and a half. You made the claim; it is incumbant on you to back it up. I have my doubts about your ability to do so; I ran a search on the average unemployment rate for central business districts in the United States and came up with an array of data which would be difficult to piece together into a single coherent statistic, but you were able to do so handily and in mere moments, meaning either A) you must have access to greater information and analytical abilities than I do, or B) you made it up.

    I feel it's reasonable to simply ask you to cite your source, as that's the most basic aspect of making factual claims. Surely if it's as easy as you claim then it would be no hardship.

  • Report this Comment On January 12, 2012, at 3:12 PM, DJDynamicNC wrote:

    For example: http://www.zacks.com/stock/news/67469/2012%3A+A+Silver+Linin...

    Office vacancies just over 14% for central business districts ("inner cities") versus over 19% for suburbs.

    That would fly in the face of your unemployment statistics for the "inner cities," but again, it's a big internet and I could easily have missed something. That could be simply and readily resolved by posting your sources.

  • Report this Comment On January 12, 2012, at 4:24 PM, Bert31 wrote:

    Hi Morgan just curious why you chose to compare the time periods of 2001 - 2008 to 2010 - present in the fifth paragraph? Why did you leave out 2009?

  • Report this Comment On January 12, 2012, at 4:29 PM, TMFHousel wrote:

    ST,

    That actually should be 2009, not 2008. Thanks for noticing; we'll get it fixed.

    Morgan

  • Report this Comment On January 12, 2012, at 4:31 PM, DividendsBoom wrote:

    You two must be congressmen. First you argue, then you argue about how you argue, and finally it devolves into an unreadable juvenile spat.

  • Report this Comment On January 12, 2012, at 4:39 PM, Bert31 wrote:

    Morgan

    If it should be 2009 that 3.2 million number is way off, isn't it? Shouldn't it be closer to 9 million?

  • Report this Comment On January 13, 2012, at 12:10 AM, moneytrail wrote:

    DJ –

    If you don’t already know what more than 70% of Americans know: that America is in a steep, accelerating, economic slide relative to much of the rest of the world; in short: “we are on the wrong economic track,” no amount of citations will convince you of the obvious. Again, I respectfully submit that you undertake to educate yourself about what is plain to most objective investors of all stripes. Your interest in “conservative,” “brown skin” and other politically charged terms seldom serves to bring about investment success but, rather, clouds one’s judgment in an already complex endeavor; namely, trying to identify sound investment opportunities.

    My questioning of Mr. Housel’s politically biased investment analysis, intentional or otherwise, is predicated upon the fact that this is not a political blog; it’s an investment analysis forum. When a professional analyst presents a position without a full airing of all the relevant economic facts, thereby creating a more optimistic analysis of the economy for readers than may be warranted based on all the relevant economic data, it is tantamount political pandering, and it diminishes the site.

    I subscribe to MF because I respect its attempt at pure investment analysis, whether they are ultimately right or wrong. Identifying what appears to be the promotion of a political agenda protects the integrity of the site. As a professional, I welcome corrections to my analyses because it makes me a better investor.

    Good luck!

  • Report this Comment On January 13, 2012, at 9:30 AM, DJDynamicNC wrote:

    I can respect any who attempt to further understand the world around them and the subject of their passions, and who share that knowledge. That's why I'd be interested in learning the source of your claims regarding inner city unemployment and economic decline.

    If, as you claim, the inner cities are experiencing economic decline, it would behoove me to know about it, as in my last several years living in the very heart of the city, I've watched unemployment statistics improve, crime rates decline, tax revenue grow, and economic activity increase. It would be helpful if you could provide a source to help correct the evidence provided by my own lying eyes.

    I would respectfully submit that, from a purely rational perspective, it is at least as likely that any perceived political bias in this article, intentional or otherwise, rests with the reader rather than the writer. Surely if you can accept the possibility of unintentional political bias in others, you can accept it in yourself?

  • Report this Comment On January 13, 2012, at 10:03 AM, TMFHousel wrote:

    ST,

    According to BLS figures, 3.2 million is correct from 2001-2009.

  • Report this Comment On January 13, 2012, at 10:07 AM, TMFHousel wrote:

    <<For example, the graph included in your article shows February, ’09 unemployment at 9.5%, when it was actually 7.6%.>>

    The graph does not begin in February. As is clearly noted in the sentence before the graph, the time frame is since "the recession officially ended in the *summer* of 2009." There's nothing political about that time frame.

  • Report this Comment On January 13, 2012, at 10:11 AM, TMFHousel wrote:

    <<Can this be attributed to coincidence; perhaps, but not likely. It appears to be more along the lines of misreporting by BLS, as further corroborated by last week’s substantial jump in new unemployment claims to almost 400,000 which I suspect is the beginning of a trend re-establishing the “real” unemployment rate to where it was before the October “surprise.”>>

    Weekly unemployment claims are always filled with noise. The substantial jump you note came on the heels of a substantial decline. The 4-week moving average is more beneficial, and it clearly shows a downward trend (albeit a slow one).

    If you find BLS figures untrustworthy, private company ADP also releases monthly job-creation figures. Its numbers are actually more bullish than the BLS data.

  • Report this Comment On January 13, 2012, at 10:20 AM, TMFHousel wrote:

    <<When a professional analyst presents a position without a full airing of all the relevant economic facts, thereby creating a more optimistic analysis of the economy for readers than may be warranted based on all the relevant economic data, it is tantamount political pandering, and it diminishes the site.>>

    Again, there is nothing political about this article. I would suggest that any political interpretations you noticed are the result of your own biases.

  • Report this Comment On January 13, 2012, at 1:32 PM, DJDynamicNC wrote:

    When one side is dealing in facts and the other side is dealing in fantasy at best or outright deception at worst, then ANY presentation of facts (related to the political divide or not) has the potential to appear partisan.

    As I often say - being partisan and being right are not mutually exclusive.

  • Report this Comment On January 13, 2012, at 5:57 PM, moneytrail wrote:

    Mr. Housel:

    I guess we can go back and forth on this issue of subjective interpretation, it’s the ultimate editorial writer’s defense, but I choose not to do so because it is pointless. Since you are writing for an investment publication rather than a political web site, you are expected to present your analyses against a backdrop of facts to the best of your ability – all the relevant facts, not those that suit you. Otherwise your analyses are little more than the musings of an editorial page writer, of which there are plenty these days, most unemployed. More importantly, poorly reasoned investment analyses based on incomplete or misunderstood information can injure the very investors who turn to MF for sound, not necessarily always predictive, investment guidance.

    As a successful, long-time professional investor that reads MF for thoughtful, professional, investment analysis I am simply trying to point out, constructively, the omissions in your article that may be providing less experienced investors a dangerously incomplete picture of where the economy may be headed from an investor’s perspective.

    Here are some of the material objective omissions in your analysis rendering it incomplete and misleading:

    1. Your graph conspicuously excludes Q1, 2009, 7.6% unemployment numbers, resulting in a misleading unemployment curve from ’09 to present. I don’t know why you excluded this material information but doing so creates the appearance that you are tailoring your presentation with incomplete information.

    2. You either are not aware, or are ignoring the problems BLS is having with its unemployment number presentations. If you are unaware, you need to become aware for your own credibility purposes rather than making specious statements about BLS’ seasonal weighting algorithms. We all know they have them; the problem is they no longer reflect seasonal swings accurately. Do you really believe that structural unemployment miraculously dropped 0.5% in a struggling economy, at the precise time hiring for the Christmas shopping season began, rather than resulting from part-time hiring and a substantial drop of more than 350 thousand unemployed Americans giving up their job search, as reported by DOL? (Please don’t answer: “Yes.”)

    3. You excluded any mention of the dramatic shrinkage in the American work force by millions of workers since ’09 that would have provided better context for your sanguine employment article. The magnitude of this negative trend in America’s “employed base” causes the skewing of BLS’s unemployment numbers towards the low side because they are not adjusting the denominator of the unemployment ratio fraction, thus resulting in lower unemployment numbers primarily due to a drop in numbers people looking for jobs, not an increase in employment. In fact, there are 2 to 3 million fewer workers in the workforce today than there were at the beginning of ’09 based on Department of Labor statistics and private economist estimates, despite the fact that the country’s eligible working population has grown by at least 200 thousand per month to more than 7 million during that period.

    4. Regardless of what the employment picture appears to be based on jobs numbers alone, our structurally damaged job creation machine, the private sector of the American economy, will not be in the repair process until we actually see unemployment rates rising, along with an increase in actual workers and an increase in the total work force (e.g- those working and looking), as existing and new industries create jobs. Perhaps you might consider tempering your future analyses with this fundamental criterion of job recovery.

    You may not fully understand the serious structural challenges facing our economy, as is evidenced by your upbeat “jobs bonanza” article, or you may simply be pushing another agenda, which you deny. Assuming it’s the former, you may want to sit back and reflect on how your words can impact your readers, especially the less sophisticated ones who are more likely to rely on your words to their detriment. Ideas and investment analyses have a market place value; as with other products, inferior ones have a limited shelf life.

    All the best of luck!

    Sincerely,

    Moneytrail.

  • Report this Comment On January 13, 2012, at 6:01 PM, Bert31 wrote:

    Morgan

    Per BLS # of unemployed in January 2001 was 6.023 million. # of unemployed in December 2009 was 15.124 million. Difference = ~ 9 million right? What #'s are you using? I am seriously just not following.

  • Report this Comment On January 14, 2012, at 7:18 AM, TMFHousel wrote:

    ST,

    I used the cumulative monthly change in nonfarm payrolls. Shoot me an email and I'll send you the data.

    Moneytrail,

    I'm typing on my phone so I have to make this brief.

    As is noted, the chart begins in mid 09 because that's when the recession ended. Thats politically biased only to the extent that your own biases cloud what youre reading. I've written several dozen articles that address the change in long term unemployment and the rising duration of unemployment. I'm not being deceptive or trying to hide anything.

    I do indeed mention the shrinking labor force in the article. Please read again.

    Do I think it's miraculous that the unemployment rate fell a half point in thee months? You'll have to tell me your definition of miracle. That's perfectly normal historically, including (or especially) on the heels of a deep recession (early 80s, etc.)

    If you don't like Bls figures, use someone else's.

    I don't know how you can call this article cheerleading or sanguine when the second half is devoted to pointing out how bad things still are. For more, search the article, 7 charts that sum up our jobs mess." I've written extensively on how deep our jobs hole is.

    Finally, you seem to imply that you found this article politically biased because I didn't skewer Obama. I think that speaks for itself.

    Morgan

  • Report this Comment On January 14, 2012, at 12:19 PM, moneytrail wrote:

    Morgan:

    Skewering Obama or any other political figure for that matter is the least of my interests when reading MF or any investment analysis. I strive to keep emotional, political issues out of my investment decisions. They generally cloud one’s judgment to one’s detriment. My primary interest is obtaining a full, factual, investment relevant presentation so that I can make decisions that are more likely to yield positive results, than losses. Regardless who the next President is investors still have to find ways to make profits, despite their feelings about the political landscape, and objective, investment analysis is the best road to the goal.

    I have been an active investor for more than 30 years and an MF subscriber for about 6 months. For the most part i've been very pleased with the quality and professionalism of its contributors’ observations and analyses, which is why when I smelled political bias in your presentation I responded.

    In any event, thank you for an interesting and open dialogue. Regardless of our differing perspectives on your “Jobs” article I am more convinced now than before that your intention is to avoid incorporating a political agenda into your investment analyses and I appreciate you taking time out of a busy schedule to engage on this issue.

    Best of luck.

    Sincerely,

    Moneytrail.

  • Report this Comment On January 15, 2012, at 3:09 PM, Bert31 wrote:

    Morgan are you serious? First I don't know how to email you. Second, I say cheerleading because Obama's biggest weakness(and where Republicans are going to focus their attacks) is the economy. The unemployment rate is the easiest, most visible and maybe simplest way to express how the economy is effecting everyday people. I am not saying any of your numbers are incorrect and am not accusing you of anything except maybe being a little over optimistic on some rather tepid data? Most other articles I read on that particular report expressed a certain pattern developing. For example, messenger and courier jobs spiking in December (due to increased buying over the internet this year and past few years) only to drop off a cliff in the next report. Also the dwindling participation rate that has already been discussed here.

    I do have a question about why you (or economists in general) use cumulative monthly change in payroll nubmers instaed of a net from 2 points in time?

    Thanks

    ST

  • Report this Comment On January 21, 2012, at 3:57 PM, thidmark wrote:

    "You two must be congressmen. First you argue, then you argue about how you argue, and finally it devolves into an unreadable juvenile spat."

    Thanks for the most intelligent comment I've read so far.

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