January Unemployment Rate Drops to 9.7%, But The News Is Still Bad

Fri, 02/05/2010 - 3:08pm | posted by Doug Mataconis

This morning’s unemployment report gave us the seemingly good news that the unemployment rate dropped three-tenths of one percent, but when you look behind that number the news still isn’t good:

WASHINGTON — The unemployment rate dropped unexpectedly in January to 9.7 percent from 10 percent while employers shed 20,000 jobs, the government said Friday.

The rate dropped because a survey of households found the number of employed Americans rose by 541,000, the Labor Department said. The job losses are calculated from a separate survey of employers.

The report also included an annual revision to the estimates of total payrolls, which showed there were 930,000 fewer jobs last March than previously estimated. The department also revised down its estimates for April through October of last year, adding another 433,000 job losses.

The November figure was revised higher, however, to show a gain of 64,000 jobs.

All told, the Great Recession has eliminated 8.4 million jobs, the department said. That’s the most of any recession since World War II as a proportion of total payrolls.

So, let’s add it up.

We lost 20,000 jobs in January. That’s the number that matters. The down-tick in the unemployment rate is related to the fact that the BLS included data from a different survey in calculating the rate. How legitimate that number is, and whether it involves something less than honest on their part, I’ll leave for others to determine. What’s important is that we lost 20,000 jobs in January even though the rate went down.

In addition to that, there were revisions to previous jobs reports:

The Labor Department also released an annual revision of U.S. payrolls on Friday, using data that wasn’t initially available. Losses for 2009 alone came to 4.8 million jobs, more than 600,000 more than previously estimated. The revision showed the economy has lost 8.4 million jobs since the start of the recession in December 2007 — 1.4 million more job losses than initially reported.

The payroll number for December was revised to a net loss of 150,000 jobs. The government had previously indicated that 85,000 jobs were lost in December.

This isn’t over yet, by any means