Payrolls Shrink by 20,000, Unemployment Rate at 9.7 Percent

The Labor Department's monthly report on the employment situation showed that employers shed 20,000 jobs in January and the unemployment rate dropped from 10.0 percent to 9.7 percent.  The Labor Department said that employment was "essentially unchanged" and that has been the case for the last three months.  However, the total of jobs lost since the recession began in December 2007 increased to 8.4 million.

Jobs losses were seen in the construction and transportation and warehousing sectors  The construction sector saw 75,000, bringing its total loss since the recession began to 1.9 million.  Transportation and warehouse workers saw their ranks shrink by 19,000, with messengers and couriers losing 23,000 jobs.  That sector has lost 223,000 jobs since January of 2009.

On the positive side, employers hired more people in the temporary help, manufacturing, retail trade, and health care sectors.  There were 52,000 more employees in the temporary help sector in January.  Manufacturers added employees for the first time in nearly three years, with 11,000 more people getting paychecks in that sector.  Retailers added 42,000 employees, after showing little change in the previous two months.  And the health care sector, which is one of the few to have added employees since the recession began, added 14,500 employees.  Employment of health sector workers has increased by 218,000 since January 2009.

The report shows that the economy is very close to adding jobs instead of shedding them.  It's like a drunk teetering on his bar stool after slamming down a line of shots.  The shots in the case of the economy are the stimulus package and easy money, and just like a drunk who's had one too many, it's about ready to topple over and jobs will stop being shed.

Analysts had expected the payrolls figure to come in with a gain of 15,000, with estimates ranging from a decrease of 100,000 to a gain of 100,000.  The unemployment rate was projected to remain at 10.0 percent, with projections ranging from 9.8 to 10.3 percent.

The chief economist at Credit Suisse in New York said that "the labor market...is beginning to find its bottom.  We're still teetering on the cusp of job growth."  A research director at GFT Forex in New York concurred, saying there was " a slow improvement in the labor market...but it wasn't quite good enough to push us into positive territory just yet."

But the economy is not out of the woods yet, an economist at Deutsche Bank in New York warned.  "The economy is moving slowly and it takes time for companies to turn around from where they were to where they are going," he said.

That process will not be helped by irresponsible, grandstanding politicians who don't have a clue about economics like Michael Steele.  Steele, in response to the jobs report, slammed the Obama administration's stimulus package, saying that approximately two million jobs were lost since the stimulus began and claiming that the stimulus isn't working.  This is, of course, ridiculous.  Virtually all credible economists say that the stimulus has helped the economy grow.

Furthermore, Steele, in his haste to score political points, ignores the fact that while two million jobs have been lost since the stimulus was enacted, the total number of jobs lost since the recession began is 8.4 million.  That means that 6.4 million jobs were lost in the approximately 14 months before the stimulus was implemented.  The job loss rate before the stimulus was enacted was approximately 457,000 per month.  After the stimulus, the loss rate was approximately 200,000.

But those numbers don't help irresponsible politicians like Michael Steele.  His irresponsible and inaccurate comments do not help the economy grow and he and the rest of the grandstanding politicians -- on both sides of the aisle -- would be well served to shut up.

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