January jobless rate falls to 9%
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Friday morning's national unemployment report left economists scratching their heads in confusion.
Generally, if the unemployment rate goes down significantly, which it did from 9.4 percent in December to 9 percent in January, there is a corresponding rise in the number of jobs.
Not this month.
The Bureau of Labor Statistics reported that the number of jobs in the country rose by just 36,000, which is hardly a ripple in the national pool of 130 million jobs.
"It's confusing," said economist Harry Holzer of Georgetown University and the Urban Institute, a nonpartisan economic and social policy research firm.
While early trading was mixed, by the end of the day Wall Street's response was to mostly ignore the unemployment report. The Dow Jones industrial average remained above 12,000, rising 30 points to close at 12,092, a 0.2 percent gain, The S&P 500 index closed at 1,310, which was up 3 points, or 0.3 percent. The Nasdaq added 15 points, or 0.6 percent, to close at 2,769.
The monthly jobs report is based on two employment surveys, one of households and the other of employers. The survey of households determines the percentage of people in the population who are unemployed. Only people who are without work and have actively looked for work during the month are considered unemployed.
In the January survey, while the overall percentage of unemployed people dropped fairly dramatically, the numbers underneath told a sober story. Nearly 500,000 people dropped out of the labor force, and 8.4 million people are working part-time as they can't find full-time work.
The average length of time that people are unemployed is now 36.9 weeks with more than 6.2 million people, or 43.8 percent of the unemployed, out of work more than six months.
The 36.9 week average duration of unemployment is a record high. It also reflects a change in how the data is collected, said Claire McKenna, a policy analyst in New York City for the National Employment Law Project. She said the duration went up because of a change in how the information is collected. Before January the amount of time people could report being unemployed was capped at 99 weeks, now it is up to five years.
First Published February 5, 2011 12:00 am
