Non-farm Payrolls 112,000
Unemployment Rate 5.6%
Average Hourly Earnings +0.1%
Average Work Week 33.7
(Econoday.com) - Despite a surging economy, employment growth is moderate at best. Nonfarm payrolls rose a lower-than-expected 112,000 in January. Balancing the disappointment was a net 55,000 upward revision in December and November data. The effect of new benchmarks and seasonal adjustments appeared modest.
The monthly employment report dominates economic expectations and often sets the tone for other data through the month. December's weak data held back stocks and held up bonds through January. January's data are likely to do the same through February. The fourth-quarter average, at a time of booming 8.2 percent GDP growth, showed a paltry payroll gain of 62,000.
The unemployment rate continues to give a misleading signal. The rate fell a notch to 5.6 percent, an improvement distorted by a second month of decline in the available labor force. The Labor Department expressed concern over the discrepancies between the establishment and household data, but said the establishment survey doesn't in fact lag. The department instead noted differences in how the two surveys categorize independent contractors.
There were good signs in the report. Aggregate hours rose 0.8 percent while the average workweek rose slightly to 33.7 hours. Rising hours and longer weeks will sooner or later force employers to increase hiring. Wages understandably remain tame. Hourly earnings rose only 0.1 percent in the month, and the year-on-year pace, at 2.0 percent, is the lowest since 1987.
A negative sign in the report was a 21,000 decline in temporary hirings, ending eight months of gains. The category should improve first during a recovery, as employers begin building staff with temporaries before hiring full-time workers. Manufacturing hiring, despite the 50+ readings in the ISM employment index, contracted again, down 11,000 in the month. Payrolls in retail trade rose a sharp 76,000, reversing two months of declines and adding substantially to January's net gain. But seasonal factors may have been at play, adding back workers that were never hired.
Consumer Credit $7.0 Billion
(Econoday.com) - Consumer installment credit expanded by $4.1 billion in November, after recording a sharper 8.3 billion gain in October. The drop in motor vehicle sales in November largely contributed to the slower pace of growth. December vehicle sales surged and this should lead to another spurt in consumer credit.
04.02.06 12:06 #