The Employment Situation Summary in Graphs, February 2011

The US Department of Labor released the Employment Situation Summary for February 2011 this morning at 830ET. The data showed an increase of 192,000 jobs from non-farms payrolls with the headline rate of unemployment declining to 8.9% from 9.0% the previous month. I am still in the process of parsing the data, but I can say that the headline numbers are largely in line with market expectations. The numbers are indicative of a slowly improving labour market, but one which is still sluggish.

Marc Chandler writes:

The US employment data was in line with expectations, but this is disappointing in that it suggests that there has been no acceleration of private sector job growth from Q4 10. The 222k rise in price sector jobs was a bit more than expected and the upward revision to the Jan data keeps the monthly average around 140k. Manufacturing jobs grew by 33k, better than the 25k the consensus expected and the Jan data was also revised up a little. This bodes well for the manufacturing output figures due out later in March. Yet the flat hourly earnings figure is disappointing and suggests limited gains in income. Auto sales point to good retail sales report, but consumption may have to have been fueled by dipping into savings more than wage and salary income. The work also did not bounce back from last Jan’s weather induced weakness and this is also disappointing. The continued decline in the unemployment rate to 8.9% is surprising, but does not appear to be reflecting underlying jobs growth as much as changes in the participation rate.

Having seen most of the numbers already, I would say the report was relatively weak. The particular areas of concern are the labour participation rate plus the average weekly hourly. Right now, the labour participation rate and the number of weekly hours are stagnate to declining. In a robust upturn, you would see the labour participation rate and hours worked increasing. More analysis is coming. In the meantime, here are the charts.

Note: the dark lines in the first two charts represent periods of recession. Also, the change in unemployment rate is usually a good coincident indicator of cycle turns. When the unemployment rate rises by 1% in a year period, it is a sign of impending recession. With unemployment lower than it was one year ago, the economy continues to show signs of a sustained recovery.