February 4, 2011 in Business, Nation/World

Unemployment falls to 9%, nearly a 2-year low

Associated Press

WASHINGTON — The unemployment rate is sinking at the fastest pace in half a century because a surprisingly large number of people say they’re finding work.

It conflicts with a business payroll survey last month that showed relatively weak job growth. But that survey doesn’t count the self-employed and likely undercounts the nation’s smallest businesses. Also, harsh weather disrupted business payrolls in January.

The unemployment rate dropped sharply last month to 9 percent, based on a government survey that found that more than a half-million people found work. A separate Labor Department survey of company payrolls showed 36,000 net jobs created — barely a quarter of the number needed to keep pace with population growth.

The government’s survey of households is used to calculate the unemployment rate. That measures the self-employed, farm workers and household employees. They are not included in the payroll survey. Many economists also say the household survey includes more people who work at small companies.

The number of people who called themselves self-employed rose by 165,000 to 9.7 million in January, the report said. That’s the highest total since last May.

“It is clear that the drop in unemployment reflected more jobs being added, not a drop in the labor force,” said Nigel Gault, chief U.S. economist at IHS Global Insight.

Harsh snowstorms last month also likely played a role. They cut into construction employment, which fell by 32,000, the most since May. Transportation and warehousing fell by 38,000 — the most in a year.

“The thumbprints of the weather were all over this report,” said Neil Dutta, an economist at Bank of America Merrill Lynch. Hiring was suppressed last month and will likely rebound in February, he said. “We know the job market is recovering.”

In one bright spot, manufacturing added 49,000 jobs, the most since August 1998. And retailers added 28,000 jobs, the largest number in a year.

The unemployment rate has fallen by eight-tenths of a percentage point in the past two months. That’s the steepest two-month drop in nearly 53 years.

But part of that drop has occurred as many of those out of work gave up on their job searches. When unemployed people stop looking for jobs, the government no longer counts them as unemployed.

The number of people who have given up looking rose to 2.8 million last month, from 2.6 million in December. About 1 million of those workers said they were discouraged. The others stopped looking because they returned to school or for other reasons.

And the participation rate, which is the percentage of the working-age population working or looking for work, fell to a 26-year low of 64.2 percent.

The number of people unemployed fell by more than 600,000 in January to 13.9 million. That’s still about double the total that were out of work before the recession began in December 2007.

50 comments on this story so far. Add yours!

hawken on February 04 at 8:59 a.m.
Just another example of contradictory government reports….
“The unemployment rate dropped sharply last month to 9 percent, based on a government survey that found that more than a half-million people found work. A separate Labor Department survey of company payrolls showed 36,000 net jobs created — barely a quarter of the number needed to keep pace with population growth.”
These numbers are as trustworthy as saying a feather in the wind is blowing North.
Shadedmuse on February 04 at 9:12 a.m.
This is because peoples unemployment is running out and the mean republican tea-baggers are no longer extending bennifits. try getting a job in Spokane its impossable. Spokane is a non growth market, get use to it. you have thousands of people looking for one bartender or cocktail waitress job, wo wants to deal with drunks mights well get me a job at the local drunk tank and or Morgue.
SpokaneLiberal on February 04 at 9:28 a.m.
It really fell because discouraged workers increased.
johnclarke on February 04 at 9:37 a.m.
Just another example of why I miss the days when Hawken was banned from posting. Any good news for the Obama adminstration is obviously wrong.
The economy is recovering. The market is above 12,000, and companies (that are sitting on record profits) have squeezed all the productivity out of the reduced workforce. This spring will bring increased hiring. We are hiring at my place of employment, and 4 of the interviews in one day canceled because they had other, higher paying opportunities. This is a slow process, certainly. Did everyone thing the recovery would begin the day Obama took office? I thought at least three years to undo the hole the Republicans dug us into. By the way Hawken, and the Tea Bag crowd - where are the Republican jobs bills ? Perhaps instead of wasting time trying to repeal my healthcare benefits and harping about spending your guys COULD GET TO WORK. Military spending obviously must be cut; what are the chances of seeing these cuts from the Republicans? None.
MrNatural on February 04 at 9:50 a.m.
I attribute this seemingly good news to a national optimism as opposed to inciting fear. Optimism stimulates opportunity (ref. State of the Union Address). I believe given time the president’s policies and his encouraging optimism and vision will get us back on our feet.
EdubU on February 04 at 9:51 a.m.
Where are the jobs Mr McConnell, Mr Boehner, and Mr Cantor?
herewegoagain on February 04 at 10:08 a.m.
I’m looking for employment. Where is it they’re hiring Mr. Clarke
Squid on February 04 at 10:09 a.m.
Does this account for people who don’t qualify for unemployment any more, or small businesses that are failing? No. In my business, I have only bid on two jobs in the last 6 months. There is no work, and no one is spending money. I am bidding against illegal Russians and Mexicans who don’t have to pay taxes on their earnings. I have to work for less to match their cash wages, but I have the tax expense they don’t have to pay. Should my employees be laid off, so I can replace them with illegals, to compete with illegals? The employment rate for illegals is rising, that’s for sure.
misjustice on February 04 at 10:29 a.m.
“Conservatives” like Hawken don’t want the employment numbers to improve, especially under President Barack Hussein Obama. They prefer that we suffer, as a nation, so they can use the dire circumstances as a political football.
Mr. Boner, where is your party’s Jobs Bill? Mr. Cantor? Mr. McConnell? Ms. Bachmann? Oh, that’s right, you’re too busy redefining rape to do the difficult job of improving the economy.
Shadedmuse on February 04 at 10:55 a.m.
Sounds like Misjustice is a Birther, because they use the Hussein that is code for the President is a Kenyan muslim socalist who is in the country illigaly. The Presidents name is not Hussein!!!!! Come on what would be the odds of the President of the united states having the same name as Saddam Hussein. What would Saddam think if he knew people in the U.S would replace George Bush with a guy named Hussein.
de3 on February 04 at 10:58 a.m.
Bottom line: there were 36,000 additional jobs created. The economy has to add about 125,000 per month, every month, on average, to maintain a steady employment rate, to account for population growth (about 1/2 is born here and 1/2 is imported).
The unemployment rate can go down either because jobs are added or because people stop looking for work. The labor force participation rate has fallen by 2 whole percentage points. For discussion on that see http://www.calculatedriskblog.com/2011/02/employment-summary-and-part-time.html
The surveys used to collect employment and unemployment information have many oddities including one, which counts someone who is working two jobs, as two workers! Discussion on that is here
http://www.calculatedriskblog.com/2011/02/daily-color-two-employment-surveys.html
johnclarke on February 04 at 11:18 a.m.
I think misjustice was using a funny.
herewego, try www.careerpathservices.org for starters and let me know how you make out. They find people jobs for no fee.
hawken on February 04 at 11:21 a.m.
d3…. We need approximately 292,000 new jobs a month to return to normal. See stats and charts here:
http://www.redcounty.com/content/how-many-jobs-are-needed-economy-recover
herewegoagain on February 04 at 11:26 a.m.
Okay, thank you Mr. Clarke for the info, I’ll contact them.
Dazzeetrader11 on February 04 at 11:29 a.m.
http://www.gallup.com/poll/145922/Gallup-Finds-Unemployment-Slightly-January.aspx
http://www.realclearpolitics.com/articles/2011/02/04/another_lousy_jobs_report_108780.htm
http://www.zerohedge.com/article/labor-force-participations-plunges-fresh-26-year-low
http://www.zerohedge.com/article/labor-force-participations-plunges-fresh-26-year-low
It’s not good and Obam’s numbers are simply manipulated figures. Sorry. The links explain what’s going on.
misjustice on February 04 at 11:31 a.m.
John, correct. It’s code for “that” guy. Kinda like a dog whistle.
; )
misjustice on February 04 at 11:32 a.m.
Well, Shaded, if we hadn’t popped off his head, I think he would approve.
; )
hawken on February 04 at 11:48 a.m.
To say that conservatives don’t want unemployment to improve is not only beyond absurd, it is juvenile.
_____________________________________________
“On the hiring front, Bernanke said it will take “several years” for unemployment to return to more normal levels. Last month, the Fed chief was more specific, saying it would take four or five years for the unemployment rate to drop to a historically normal level of around 5.5 percent or 6 percent.
The Fed chief spoke one day before the government releases its employment snapshot for January. Economists believe the unemployment rate ticked up to 9.5 percent last month, from 9.4 percent in December, and employers added a net total of around 146,000 jobs. Job-creation would need to be twice as fast each month to make a noticeable dent in unemployment.”
One of the SR articles today.
Obama is responsible and he is done in two years.
I quit believing in Santa Claus and the Easter Bunny when I was about 6.
hawken on February 04 at 12:04 p.m.
Check out this dialog if you still believe in Santa Claus and The Easter Bunny: Actual unemployed about 16%
Santelli Slams CNBC Panelists for Spinning Jobs Report
The mainstream news media will likely latch on to the dropping unemployment rate, despite job gains that were less than one-fourth of the consensus estimate of 148,000 jobs added. One of the CNBC panelists noted that the increase was “way below consensus.”
CNBC’s Rick Santelli even lashed out at some of the CNBC “Squawk Box” panel that were discussing the latest jobs report.
“[W]e have overwhelming evidence the jobs market is disappointing, and all of you are trying to look for that one half of spaghetti in a 50 lb. spaghetti bowl. This is not great data,” Santelli claimed. “We know that the U6 probably gives you a better indication of the true unemployment rate …”
CNBC’s Steve Liesman interjected: “It went down, Rick. It went down - ”
“Yeah, what is it?” asked Santelli.
“It went down Rick, to 16.1 [percent],” Liesman said.
“Oh boy, guys! 16.1 [percent] is probably the unemployment rate. That’s cause celebre,” Rick sarcastically shouted on the trading floor of the Chicago mercantile exchange.
http://www.mrc.org/bmi/articles/2011/Santelli_Slams_CNBC_Panelists_for_Spinning_Jobs_Report.html
So, is that feather in the wind still blowing North? Reference to my original post.
johnclarke on February 04 at 12:09 p.m.
Yah herewego, if you can somehow provide a contact I will tell about my employer - I don’t want to put the information on an open forum. Don’t want The Man tracking my movements. :)
johnclarke on February 04 at 12:17 p.m.
Hawken, instead of posting quotes and stories - why don’t you post evidence of Republican efforts to create jobs? Surely the the new House must have big efforts just waiting in the wings no? Corporations only pay 7% of all taxes, so it would seem that the tax structure is in their favor. The Dow is over 12k, so the market is doing well.
Please, enlighten us all with the Republican plan for creating jobs. I assume that you can’t say tax cuts, because Obama extended those in spite of no evidence that lower personal taxes for the wealthy create jobs. Bills start in the House, not on the President’s desk.
de3 on February 04 at 12:29 p.m.
Hawken, I agree with your statement that “We need approximately 292,000 new jobs a month to return to normal” in reply to my comment that “The economy has to add about 125,000 per month, every month, on average, to maintain a steady employment rate”
Obviously, we want to return to a normal unemployment rate. But at 36,000 new jobs created, we are not truthfully maintaining even the present status quo of high unemployment, which is the point I was crudely making. The unemployment rate has paradoxically gone down because the number of people participating in the labor force has also gone down by 2 percentage points which is a huge drop in labor force participation.
As those folks return to looking for work, the unemployment rate may go up again even if the number of jobs increase significantly.
You are correct that we need to add vastly more jobs per month to undo the recent economic downturn. Simple math suggests it will be many years yet before we see a return to “normal”.
hawken on February 04 at 12:32 p.m.
Clarke you’re off topic and could get flagged. Well, maybe not you.
Imagine a man walking across Death Valley in July. He’s about to die of thirst. Out of nowhere, a young man drives up in a limousine surrounded by secret service agents.
The man in the limousine, steps out and says to the man about to die from thirst, in the middle of Death Valley, in July: “Don’t worry my friend. You have only 9 miles to go before you get to water.”
The man in the limousine, surrounded by secret service agents, then gets back into this limousine and drives off.
The man in the limousine then says to his driver,,,,
“poor guy. I couldn’t tell him that the unemployment rate is actually over 16%, not 9.”
Besides, what’s a little lie or misrepresentation. Who knows, he might still believe in Santa Clause or the Easter Bunny.
Besides, if he can go 9 why not 16? But, we won’t tell him that for now. If he really understood that unemployment is actually about 16%, my approval ratings might tank.
Back to the white house driver.”
Cheezwhiz on February 04 at 12:40 p.m.
In my line of work, I had three years worth of contracts lined up until Obama announced that we were in a recession. Within a week, we lost 70% of those contracts, because those customers decided to wait. A year from that, almost all of the contracts were dead. We laid off the employees.
I realize there were bank failures, bankruptcies, and foreclosures, but the impact wouldn’t have been nearly as devastating if it wasn’t made out to be as terrifying as the Obama campaign did. Their fear tactics created this problem that they won the election because of. Now they blame the GOP.
Oddly enough, they found that attempts at reversing the fear and using sunny false statistics, which was the polar opposite of how they created it, didn’t work to fix it. Bail outs and stimulus money didn’t work either. The public is going to wait till they see other people spending money before they do.
I think it will take much more than a pep rally and dismal gains in statistics to fix this. I have no solutions for any of this that won’t make the pit of debt deeper and bankrupt this country. It will take a feeling of economic security to get people and businesses to spend money. How do you do that, without cutting taxes, or other overhead costs? That would only increase the deficit.
Dazzeetrader11 on February 04 at 1:05 p.m.
Where are those jobs Obama promised if his stimulus worked?
Well, none yet but he confiscated upwards of a trillion dollars to hand over to his bank and wall st friends. SO where are the jobs this president promised?
House has been Republican for 2 months…Obama had 2 years and trillions spent to mess this whole thing up. The Senate is still Democrat liberal.they haven’t stopped at all.
It will take 300,000 jobs added per month for 3-4 years before recovery from his spending is here.
Factor in the costs of Obamacare, and the US will be bankrupt. Not a pleasant outcome. It’s at Obama’s doorstep. It’s at his doorstep. He has no ideas but he will force the country to socialism. No way out of it unless he’s stopped. He’s incompetent and this is his internship in socialism. He’s like it. The country doesn’t. He needs to go and take his friends with him. And in case you don’t notice it today: Unemployment is worse.
DickAdams on February 04 at 1:19 p.m.
johnclarke, claims to be employed. I`d guess it must be a government job spending all hours of the day posting comments. Its hard to believe he works in the private sector. If he does I wonder how much longer his employer can stay in business?
johnclarke on February 04 at 1:25 p.m.
Daisy, for like the 4,000th time the TARP was a product of the Bush administration. Please write this down.
Hawken, my post is on topic. I asked you a simple question. Flag away. Again, when cornered and asked for facts or data you respond like most Tea Party types. You switch into disinformation mode. Clearly you are not interested in adding value to this forum, so if you don’t have any valid points then I will wish you a nice day. I want to repeat how civil this forum was without your presence.
johnclarke on February 04 at 1:34 p.m.
Yes, Dick. I’m employed. Mind your own business Dick.
monkeyman on February 04 at 1:49 p.m.
Some of the commenters here should get paid somehow. They are offering great entertainment for FREE…!
misjustice on February 04 at 1:55 p.m.
Hawken sqawked, “Clarke you’re off topic and could get flagged. Well, maybe not you.”
How is discussing potential job opportunities on a thread about employment numbers off topic????
Still bitter about the time-out, I see.
; )
saveyourtatas on February 04 at 1:58 p.m.
OK Fellas. Mr. Objective here attempting to point out some simple things. Obama is not evil. Neither is the GOP. The economy and outside factors have more to do with unemployment rates than Obama or Bush or any pol.
The economy is slowly getting better, which helps Obama.
The economy is not great yet and may get worse. Huckabee.
Not every little thing rests upon blame assignment and the attack on your opponent. Not all Obama fans are liberals.
Not all Ronald Reagan fans are religious right tea partiers.
When casting aspertions at your various enemies, keep in mind the old adage. When you point your finger at someone else, there are three pointing back at you. Just because Clark has time to blog does not mean he is out of work. He might be a very good multi tasker or the owner of his own business. While I agree with Dick Adams on most(RPS), he is off on this one and it points to his retirement and potential bad mood (often). Those who are retired should not attack those working for spending too much time blogging. It is hypercritical. Unfair. Intellectually dishonest.
Clark, on the other hand, you are not always right (like me).
The economy is getting a little better and it should be a good thing. Not a “political football” as mentioned above. So, fellas, when you start attacking a person and not an issue, keep in mind that you might need less blogging and more therapy(-:
johnclarke on February 04 at 2:10 p.m.
I’m wrong all the time, and I have admitted it. However, I am right more that all of the Tea Party combined with Hawken and multiplied by Daisy. I’m so right, I would be called right - but unfortunately they are called right. I’m called Independent.
saveyourtatas on February 04 at 2:33 p.m.
John, you make it too easy, but I like the sense of humor.
(-:
hawken on February 04 at 2:52 p.m.
Here is the U6 Unemployment rate from the Bureau of Labor Statistics. 16.1% January 2011
http://www.bls.gov/news.release/empsit.t15.htm
My points above corroborated.
SpokyDaBear on February 04 at 3:03 p.m.
The economy depends on perspective…
“It’s only a recession if your neighbor is unemployed.
It’s a depression if you are unemployed….”
Spokane is a service job economy…
unless you have a high school diploma and don’t mind shooting, beating and running over people… then you can be one of Mead high school’s finest and be a Spokane Cop, like Gordo Ennis..
Like Gordo said on his facebook post, It’s all a charade…
zelda on February 04 at 3:32 p.m.
From what I’ve read, the calculations used to produce this report weren’t particularly rigorous so it’s best to not rely on it as an indication of anything. Throw this one out and look for the February jobs report as a better barometer of how things are going.
hawken on February 04 at 3:50 p.m.
d3… thank you for the clarification…. we do agree.
Diana on February 04 at 3:58 p.m.
hawken, I’m interested in your answer to the question johnclarke posed at 12:17 p.m.
What’s the matter? Can’t answer it? The Republican efforts to create jobs? No?
misjustice on February 04 at 4:19 p.m.
*crickets*…
Diana on February 04 at 5:06 p.m.
You said it, sister!
Dazzeetrader11 on February 04 at 6:05 p.m.
SHovel ready mean anything to you Clarke for the 4000th time? $1 trillion for what? I know you’re older so I don’t want you to be confused. Not tarp…. the STIMULUS….go to work on the Stimulus for all those BS shovel ready projects. You know…the ones that he denies now? You know…the trillion that went to his friends on Wall St and Banks?
It’ s impossible to justify that. He’s a bum….and incompetent bum. Had no experience and it’s showing. Unemployment numbers are sinmply meant to fool the public and gain some momentum. He’s lying and everyone knows it.
For this alone, he should be run out of office. Kinda like Verner…another fiscally irresponsible Liberal Dem.
Diana on February 04 at 8:12 p.m.
Daisy, don’t drive tonight.
greenlibertarian on February 04 at 10:37 p.m.
“hawken on February 04 at 2:52 p.m.
Here is the U6 Unemployment rate from the Bureau of Labor Statistics. 16.1% January 2011
http://www.bls.gov/news.release/empsit.t15.htm
My points above corroborated.”
The lowest number in a year’s worth of data. It was 18% 1 year ago.
Not sure what point you were failing to make, but the U1-6 data prove the point that every single BLS measurement of rate of unemployment, has trended down since a year ago.
Some of you folks ain’t too bright in that you cite stats that are directly opposite of your malformed opinions. What a surprise.
Oh, and the Labor Force Participation rate is also greatly affected by retirements, and guess what in 2010 the first of baby-boomers hit age 65. Labor Force Participation rate will be going down as the massive baby-boomer cohort retires. Duh.
johnclarke on February 05 at 10:58 a.m.
“Well, none yet but he confiscated upwards of a trillion dollars to hand over to his bank and wall st friends”
Again Daisy, me thinks you are confused.
Nice green ! Facts and data, when understood - ends the argument.
misjustice on February 05 at 9:09 p.m.
@ green, *snap*!
; )
DickAdams on February 05 at 9:47 p.m.
johnclarke: I`m told you are a public employee. In that case it is my business. Its obvious your commenting during working hours.
johnclarke on February 06 at 6:57 a.m.
Don’t know who told you that, but I’m not. So again Dick, nothing I do is any of your business.
eagleproducer on February 09 at 9:04 a.m.
Are prison inmates counted as unemployed?
What would be the rate if they were all released and looking for work?
We have a huge problem in this nation getting employers to bear their share of the burden. It’s time to force them if they don’t by nationalizing their assets. I’m talking to you, Exxon/Mobile, G.E., et. al.!
Hcklbery on February 09 at 10:48 a.m.
“Unemployment falls to 9%, nearly a 2-year low”
9%
and THAT’S a 2 year LOW ???
WOW.
THE OBOMB AFFECT.
Hcklbery on February 09 at 11:14 a.m.
SPOOKYUCKY sounds like an LUGY SHAFTVEZ fan.
One only needs to open their eyes to the crumbling economy and pain brought to the poor MASSES in Venezuela to intelligently observe the drastic effects and see the FOLLY of GREEDY Govt take overs of the private sector.
The OPERATIVE word being “INTELLIGENT”.