651,000 jobs lost but unemployment rate at 8.1% in U.S.

This is the most important  employment number in recent memory. Consensus estimates were for 650,000 with a wide range from 500,000 to 800,000.   Everyone is looking to this number to determine where we are headed.

There was a significant downward revision to January numbers as well.  I will parse the data so check back.

The Bureau of Labor Statistics had this to say in the press release:

THE EMPLOYMENT SITUATION: FEBRUARY 2009

Nonfarm payroll employment continued to fall sharply in February (-651,000), and the unemployment rate rose from 7.6 to 8.1 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Payroll employment has declined by 2.6 million in the past 4 months. In February, job losses were large and widespread across nearly all major industry sectors.

Unemployment (Household Survey Data)

The number of unemployed persons increased by 851,000 to 12.5 million in February, and the unemployment rate rose to 8.1 percent. Over the past 12 months, the number of unemployed persons has increased by about 5.0 million, and the unemployment rate has risen by 3.3 percentage points. (See table A-1.)

The unemployment rate continued to trend upward in February for adult men (8.1 percent), adult women (6.7 percent), whites (7.3 percent), blacks (13.4 percent), and Hispanics (10.9 percent). The jobless rate for teenagers was little changed at 21.6 percent. The unemployment rate for Asians was 6.9 percent in February, not seasonally adjusted. (See tables A-1, A-2, and A-3.)

Among the unemployed, the number of job losers and persons who completed temporary jobs increased by 716,000 to 7.7 million in February. This measure has grown by 3.8 million in the last 12 months. (See table A-8.)

The number of long-term unemployed (those jobless for 27 weeks or more) increased by 270,000 to 2.9 million in February. Over the past 12 months, the number of long-term unemployed was up by 1.6 million. (See table A-9.)

Note the line: “The number of unemployed persons increased by 851,00.” This is a more realistic assessment than the 651,000 number which comes from a different survey. In addition, hours worked decreased for the third month running to 33.3 hours per week, while average hourly earnings basically was flat. This is a very weak employment report and it confirms my read of double-digit unemployment by year-end. But, it also gives zero increase in earnings for those still employed and that ll mean continued weakness in consumption going forward.

We should watch the average hourly earnings data more going forward as an indicator for where consumer spending might be headed.