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Monday, May 20, 2024 | Back issues
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Unemployment Dips to 9.7% as Jobs Stabilize

WASHINGTON (CN) - Unemployment fell in January, dropping from 10 percent to 9.7 percent, and the number of jobs remained stable. "During the past three months, we've had essentially no change in payroll jobs, which is a dramatic improvement," Bureau of Labor Statistics Commissioner Keith Hall said Friday during a hearing. Republicans were noticeably absent.

Lawmakers had worried that reports from previous months showing a stemming of job losses might be transitory, but this time, they appeared bolder in their optimism.

"We are no longer facing an avalanche of job losses," Joint Economic Committee Chair Carolyn Maloney from New York said.

Without any Republicans attending the hearing, Democrats were free to commend the actions of their party for the drop, without the usual criticism of the $787 billion Recovery Act.

"The January jobs report provides fresh evidence that the Recovery Act has gotten the economy moving again and is helping to get Americans back to work," Maloney said.

Maloney said Republicans had left in anticipation of a snow storm that's expected to pile two feet of snow in Washington over the weekend. But the presence of Democrats led some to question whether the morning's encouraging job data played a role.

Republicans have been openly critical of the Recovery Act, painting it as expensive and wasteful. When Hall testified that the job market showed signs of stabilizing in November, Ranking Member Kevin Brady from Texas cautioned Democrats "about any kind of end-zone dance."

During an interview, Hall said the labor market is showing signs of strengthening. He pointed to a 1.2-hour increase in the manufacturing workweek in January, which he said is a leading indicator of a strengthening labor market.

The proportion of part-time workers also declined from 17.3 percent to 16.5 percent. "That was a nice sign," Hall said, suggesting that part-time workers are being absorbed as full-time workers.

And despite the smaller workforce, worker productivity has increased 6.4 percent. Businesses typically increase the hours of their employees before taking on new hires.

Still, the country has 14.8 million unemployed, and the new report estimates that 8.4 million people have lost their jobs since the recession began in December 2007, which is substantially higher than the roughly 7 million previously reported.

Jobs increased the most in retail trade and help services. In fact, businesses that help the unemployed search for jobs added nearly 250,000 jobs. Most of the job losses were in construction.

Also, men lost their jobs at a much higher rate than women, the report states. Women lost 2.6 million of the total 8.4 million jobs lost.

Blacks were the only group to see an increase in unemployment in January, up slightly to 16.5 percent. Unemployment of Hispanics fell to 12.3 percent from 12.6 percent. Whites experienced a similar decrease, easing to 8.7 percent unemployment.

Those without a high-school diploma faced 15 percent unemployment, while high-school graduates without college degrees had 10 percent unemployment. Those with only some college faced 8.5 percent unemployment, and those with a bachelor's degree or higher had 4.9 percent unemployment.

The employment rate for people born outside the United States was 11.8 percent, higher than the 10.3 percent unemployment for U.S. natives. The numbers were taken from people aged 16 years or older.

The study also expanded its reach in January to include statistics on veterans and the handicapped. Veterans had a 12.6 percent unemployment rate.

The overall drop in unemployment falls outside of the 0.2 percent margin of error for the study, but the estimate that the economy lost 20,000 jobs last month falls easily within the 100,000 margin of error. Hall said the number of jobs remained "essentially unchanged."

He acknowledged the seeming paradox of improved unemployment in the face of no net job increase, but pointed to a slight discrepancy between the household data, where the bureau gets its rough unemployment estimate, and the non-farm payroll data, where the bureau gleans the hard numbers.

Because unemployment counts only those who have looked for work in the past four weeks, Hall explained, a growth in people looking for jobs -- spurred by the hopeful numbers -- could mean that unemployment numbers won't improve as fast as job growth.

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