Unemployment at 9 Percent is Still Disappointing

Unemployment fell from 9.4 percent to 9.0 percent in January—but don’t jump for joy just yet. Nonfarm payrolls only added a net of 36,000 jobs, and we need roughly 125,000 net jobs a month just to keep up with population growth. The WSJ reports this morning that stock have been down some on the job news since forecasts had been anticipating as much as 136,00 jobs in January:

Nonfarm payrolls rose by 36,000 last month as private-sector employers added 50,000 jobs, the Labor Department said. The December number was revised to show an increase of 121,000 jobs, from a previous estimate of 103,000. Economists were expected an increase of 136,000 jobs in January. “It’s obviously a disappointing number given where we’ve been,” Brian Levitt, economist at OppenheimerFunds, Inc. said.

One of the reasons that the rate fell with just a few jobs added is that there has been an increase in those not looking for work. The Bureau of Labor Statistics reports:

In January, 2.8 million persons were marginally attached to the labor force, up from 2.5 million a year earlier. (These data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

See the full BLS report from this morning here.

In fairness, the report is pretty confounding in that its seems to be moving in two directions at once. There are few jobs but a lower rate of unemployment. Even the underemployment figure fell to 16.1 percent from 16.7 percent. However, adding to the mix Gallup’s estimate that unemployment is closer to 9.8 percent (not seasonally adjusted) stirs the pot once again. And the fact that the actual jobs gain (which will be adjusted by deeper measures next month) was so low relative to expectations should not be overlooked.