Earlier this morning, the Labor Department released employment data
covering January. Based on the report, the unemployment rate fell to 5.6%, down
0.1% from December's 5.7%, while payroll employment rose by 112,000 jobs.
Reported results for the unemployment rate exceeded the consensus
forecast, which was for no change. However, results for payroll employment, for the
second month in a row, were well below the consensus forecast, which was
looking for a gain in payroll jobs running in a range of roughly 150,000 to 175,000.
There are two components to each month's employment report, the household
survey and the payroll survey. The unemployment rate is derived from the
household survey, making it a visible, sensitive number for political purposes.
As for the payroll survey, it represents the number generally more important
to the behavior of the financial markets. The report today indicated an
increase of 112,000 jobs during January. This compared with a revised increase of
94,000 in payroll employment during January of 2003. (Before revision, the
January 2003 payroll number stood at +158,000.)
(NOTE: Included in today's report were benchmark and seasonal-adjustment
revisions to the payroll survey. A very quick examination reveals that
overall, net revisions were not terribly significant. However, they did tend to
increase the strength of the numbers in the most recent months at the expense of
2003's preceding months.)
Today's report included upward revisions to December and November payroll
data, to +16,000 from +1,000, and to +83,000 from +43,000. Thus, including
revisions, payroll employment over the last three months increased by a net of
211,000 jobs, compared to the 156,000 gain before the December and November
adjustments. (For the same three-month period in 2003-2002, payroll employment
contracted by 152,000.)
In addition to the reconfiguration of strength/weakness in the payroll
data due to the benchmark revision, there was an additional item that caught my
eye. According to the Labor Department, retail trade employment grew by a
hefty 76,000 in January. There was a caveat in the report that that since fewer
seasonal employees were hired last year during November and December for the
Christmas season, there were fewer to be laid off in January. Maybe, maybe
not, but this sure looks like a faulty seasonal-adjustment situation to me.
The following table puts into perspective the reported growth in payroll
employment over the trailing three months, versus the comparable period during
the prior five years. (These numbers incorporate the benchmark revisions.)
----------------------------------------
TRAILING THREE-MONTH PAYROLL EMPLOY-
MENT GROWTH (Thousands of Workers)
----------------------------------------
2004- 2003- 2002- 2001- 2000- 1999-
Mo. 2003 2002 2001 2000 1999 1998
----------------------------------------
Jan. 112 94 -165 -53 194 113
Dec. 16 -209 -212 124 294 344
Nov. 83 -37 -332 183 295 285
----------------------------------
Tot. 211 -152 -709 254 783 742
=== === === === === ===
----------------------------------------
According to today's report, average hourly earnings rose two cents in
January, to $15.49. This represented a gain of approximately 0.1% from
December's revised $15.47 (revised downward by three cents). Year over year, average
hourly earnings were up 2.0%.
The table below contains the latest available results for key employment
and inflation series. Payroll employment and average hourly earnings data
include the benchmark revisions.
-------------------------------------------------
KEY U.S. EMPLOYMENT AND INFLATION DATA
-------------------------------------------------
PAYROLL
UNEMPLOYMENT EMPLOYMENT AVERAGE HOURLY
RATE CHANGE EARNINGS
(%) (000s) ($s)
--------------- ---------- -----------------
Month Yr. Yr. Yr. Year/
/Year No. Ago No. Ago No. Ago Year
--------------- ---------- ------------------
01/04 5.6 5.7 +112 +94 15.49 15.18 2.0%
12/03 5.7 6.0 +16 -209 15.47 15.18 1.9
11/03 5.9 5.9 +83 -37 15.46 15.13 2.2
10/03 6.0 5.8 +88 +83 15.43 15.10 2.2
09/03 6.1 5.7 +67 -47 15.41 15.05 2.4
08/03 6.1 5.8 -25 +11 15.41 15.00 2.7
07/03 6.2 5.8 -45 -111 15.40 14.96 2.9
06/03 6.4 5.8 -14 +25 15.34 14.93 2.7
05/03 6.1 5.8 -28 +2 15.31 14.86 3.0
04/03 6.0 5.9 -20 -68 15.25 14.81 3.0
03/03 5.8 5.7 -110 +43 15.27 14.80 3.2
02/03 5.8 5.6 -159 -90 15.27 14.77 3.4
-------------------------------------------------
EMPLOY. COST INDEX (%)* PRODUCTIVITY (%)#
----------------------- ------------------------
Year Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Yr.
----------------------- ------------------------
2003 1.3 0.9 1.0 0.7 3.1 6.1 9.5 2.7 4.2
2002 0.9 1.0 0.8 0.7 9.7 0.8 4.5 1.5 4.9
2001 1.1 1.0 1.0 1.0 -0.2 3.4 1.6 6.8 2.1
2000 1.2 1.0 0.9 0.9 -1.8 7.6 -0.3 3.3 2.7
1999 0.4 1.1 0.9 1.1 2.8 0.7 3.1 6.2 2.8
1998 0.7 0.8 1.0 0.7 3.0 1.3 3.0 4.0 2.6
1997 0.7 0.8 0.8 1.0
-------------------------------------------------
CONSUMER PRICE INDEX## PRODUCER PRICE INDEX@
-------------------------- ---------------------
Month Yr. Year/ Yr. Year/
/Year Index Ago Year Index Ago Year
-------------------------- --------------------
12/03 185.0 181.6 1.9% 144.9 139.3 4.0%
11/03 184.6 181.4 1.8% 144.5 139.7 3.4%
10/03 185.0 181.2 2.1% 144.9 140.1 3.4%
09/03 185.0 180.9 2.3% 143.8 139.0 3.5%
08/03 184.5 180.5 2.2% 143.4 138.6 3.5%
07/03 183.9 180.1 2.1% 142.8 138.6 3.0%
06/03 183.6 179.8 2.1% 142.6 138.6 2.9%
05/03 183.3 179.5 2.1% 141.8 138.4 2.5%
04/03 183.3 179.3 2.2% 142.4 139.0 2.4%
03/03 183.9 178.5 3.0% 144.8 139.2 4.0%
02/03 183.3 177.9 3.0% 142.8 138.1 3.4%
01/03 182.2 177.6 2.6% 141.2 137.7 2.5%
-------------------------------------------------
NOTE: All data are seasonally adjusted. *Total
civilian compensation, 3-month change. #Nonfarm
business output per hour, annual rates. ##All
urban, all items. @Finished goods.
-------------------------------------------------
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