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Posted at 7:00 AM ET, 01/ 7/2011

Five things to watch in today's jobs report

By Neil Irwin

jobs.jpgJob seekers prepare for career fair to open at Rutgers University in New Brunswick, New Jersey, Jan. 6. (REUTERS/Mike Segar)

All eyes will be on the Bureau of Labor Statistics at 8:30 Friday morning, when the agency will release a much-anticipated report on the employment situation in December.

There has been a string of promising economic data in recent weeks, offering hope that the labor market was finally picking up as 2010 ended. The jobs report will offer the most important evidence yet of whether that rising optimism is justified.

Economists expect employers will have created 150,000 net new jobs in December, a sharp improvement from the 39,000 jobs added in November. That, they estimate, would be enough to drive the unemployment rate down to 9.7 percent, from November's level of 9.8 percent.

Those results would be consistent with other recent labor market indicators. The number of people filing new claims for unemployment insurance benefits fell to its lowest level since 2008 in late December, and payroll processing firm ADP said Wednesday that it estimates private employers created a stunning 297,000 jobs in December. However, November's jobs report was a disappointment, showing much weaker job creation than analysts had expected, so there are no guarantees that the official Labor Department numbers will match other indicators.

Here are the things to watch in the report beyond what happens to overall job growth and the unemployment rate.

Revisions:
That disappointing November number may well be revised upward as the Labor Department incorporates more complete information from the employers surveyed. That would be a good sign that the earlier, weak job growth number was more a statistical aberration than a trend.

State government payrolls: Analysts expect for private payrolls to grow even faster than total payrolls, with 175,000 new jobs from private employers expected. Translation: 25,000 government jobs are expected to have been slashed, primarily due to state and local governments responding to their big budget gaps by cutting back. This is likely to be an ongoing drag on economic growth through 2011, and the number of state and local job losses will give a good indication on how big a drag they are likely to be.

Change in the labor force: While the unemployment rate will get plenty of headlines after the release, its components are more important. The big question is whether the labor force is growing or shrinking. If more people decide to look for work, it could be a sign of confidence in the job market, yet drive the unemployment rate up a bit due to the lag between when they start looking for a job and when they find one. Conversely, if people give up looking for a job out of frustration, it would lead the unemployment rate to drop because they no longer count as unemployed.

Weekly hours and earnings: The question for the economy is not just how many jobs are created, but what kinds of incomes people who have those jobs are earning. Economists are projecting that average hourly earnings rose 0.2 percent in December while the average workweek will stay unchanged at 34.3 hours. If either of those figures is better than expected, it would mean more money in workers' pockets and bode well for the economy in 2011.

"Real" Unemployment: Besides the unemployment rate that is widely cited and discussed -- 9.8 percent in November -- there is a broader definition of joblessness that offers a more complete picture of how many people are struggling. U-6, as it is known, captures not only people who do not have a job but are looking for one, but also people who are working part time but want a full time job, and people who want a job but have given up looking for one. The rate was unchanged at 17 percent in November, and it would be a welcome sign for American workers if it started falling in a significant way.

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By Neil Irwin  | January 7, 2011; 7:00 AM ET
Categories:  U.S. Economy, U.S. Labor Department, Unemployment  
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Next: Jobless rate drops to 9.4 percent

Comments

Obviously a result of the election, and not the 2 years of work at fixing the Repuke economic debacle.

Posted by: Anonymous | January 7, 2011 8:27 AM | Report abuse

I'm glad that you do take into account in this story the numbers of people who are normally not including in the usual unemployment statistics. Those higher numbers you quote should receive wider coverage. The reason they don't is that our elected officials and the corporations that back them do not wish to admit to the real damages their actions against the American worker have caused. If they did then something serious and damaging to them would have to be implemented.

I do question the higher numbers of employed posted in today's Department Of Labor stats for December. Those numbers are boosted by the fact that a good amount of higher employment is produced by seasonal workers in retail. Come January it's a "Happy New Year, Merry Christmas" from the retailers and then its "Goodbye, good luck" from them in the next breath. When the numbers went up as well earlier this year they were indicated to be as the result of temporary census workers boosting them. Can we see similar honesty applied to December’s unemployment numbers acknowledging their seasonal influence?

Posted by: PayPaul | January 7, 2011 8:45 AM | Report abuse

As the economy continues to recover, and we start to see stumbling job growth, as shown in today's unemployment report, will older Americans, who lost jobs at record rates during the Great Recession, be able to get back to work?  Unemployed older workers need jobs for both current income and to prepare for retirement.  The majority  of older Americans have not saved enough to maintain their standard of living during their retirement years, and the situation is even more dire for older workers who have been forced to use their retirement savings to tide them over while they have been unemployed. 


Based on our video interviews with Americans for our multimedia documentary project Over 50 and Out of Work (www.overfiftyandoutofwork.com), we predict that older workers will not be rehired at the same rate as younger workers.  Cultural and structural impediments will hinder many older workers from finding new jobs as the economy recovers. 


The trend in duration of unemployment to date bolsters our belief that older workers will continue to struggle to find jobs.  Although the recession was declared over in June 2009, the average number of weeks that older workers are unemployed has continued to lengthen and reached 45 weeks in Nov. 2010, an all-time record and longer than for any other age group.  If increasing numbers of older Americans try to return to the labor force as the economy slowly recovers, the job picture for older workers may actually worsen, rather than improve.

    
The Great Recession has impacted older workers much more negatively than any postwar recession, and their ability to return to work as the economy rebounds looks like it will be slower than for other age groups as well. 

Posted by: samueldnewman | January 7, 2011 9:01 AM | Report abuse

I find it completely tiring to see such blatant mis-information spread across the many news outlets in America. It would be refreshing to actually see some sort of realistic numbers reported when it comes to the unemployed and the amount of actual jobs created. I cannot see how the powers-that-be can voice with a straight face that less than 10 people in 100 are not employed.
Realistically this statistic is around 16-18% and going nowhere but up. Dismissing persons who can no longer collect unemployment, but are still without work may look fantastic on paper, but in reality is plain sucks. Americans are starving, homeless, scared and desperate and those who "We the People" have dispatched to Washington D.C. to represent our wishes are doing less than nothing. Filling the hours of congressional functions with nonsense, in-fighting and going about the business of lining their personal finances with our hard-earned dollars and too busy pointing at one another as scapegoats for the state of this country to actually worry about us folks who, unfortunately due to a diminishing income cannot promise to write a big fat check for your future endeavors. The ruling class are no longer investing in America's future as it doesn't have one to speak of.

Posted by: Michael Helweg-Las Vegas, NV | January 7, 2011 12:13 PM | Report abuse

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