Job figures only add to the confusion
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KAI RYSSDAL: We begin today with the nuts and bolts: A) Because it’s more important and, B) because it’s more important. For the first time in more than four years the economy ended a month with fewer jobs than it started. It’s not a big tilt to the negative — 17,000 fewer jobs in January, if you want the specific number.
Many analysts are calling it the surest sign yet we’re in a recession. But if you want some economic clarity out of today’s report it’s not there. Our senior business correspondent Bob Moon reports.
BOB MOON: Focus on a few specific areas and the numbers are stunning. More than 28,000 manufacturing jobs were lost in the past month, 27,000 construction workers were cut. But job placement expert John Challenger says this is hitting much like a tornado that leaves the neighbor right next door untouched:
JOHN CHALLENGER: We know financial services, housing market, automotive, those sectors in the economy are in recession. But the same time, you look at health care and energy and global business, it suggests that the economy is still really ticking strongly in areas outside of where the real problems lie.
Only adding to the confusion, the unemployment rate actually dropped slightly, because fewer people were looking for work. Wachovia senior economist Mark Vitner saw something else curious in the latest numbers.
MARK VITNER: The weakness that you expected in construction and manufacturing was there, but we also saw small declines in employment in business and professional services. Which is a part of the economy that generally tends to continue to grow even throughout a recession.
Could the numbers be suspect? They’re always subject to revision. Indeed, today the government revised its number for December payrolls sharply higher. And Vitner says even some of today’s payroll estimates don’t seem to add up.
VITNER: We also saw some job losses at online retailers, which is very odd. I mean, Amazon had come out and said that they had their best Christmas ever. So we wouldn’t expect to see job losses in a part of the economy that saw 25 percent growth in retail sales.
The contrasting signals could mean the numbers need a further look. Or, they might just mean the economy is tanking faster than many experts thought. Either way, analysts say the Fed is likely to maintain its interest-cutting insurance policy.
In Los Angeles, I’m Bob Moon for Marketplace.
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