A Strong Headline Number, But Mixed Details:kenny,you have a lot to learn
Benchmark revisions show that the 112,000 gain in January payrolls
was the best since December 2000. The revisions to April 2003 trough
December 2003 only marginally changed net job gains: 123,000 jobs
were added to the April through December period. The revisions did,
however, alter the shape of the trajectory: November and December
were revised up, October through August were revised down, and July
through April were revised up. The new trajectory shows a gradual
pick up in job growth as opposed to the more volatile path traced by
the pre-revision data.
The details were mixed. Temporary hiring, a leading indicator of
payroll growth, declined after several months of healthy advances.
At the same time, the work week, which also foreshadows job growth,
was up 0.2%. Rising payrolls and an advancing workweek pushed up
aggregate hours worked 0.8% during the month.
Another disappointing aspect was the decline in the monthly
diffusion index, which measures of how widespread job gains have
been. The index fell below the 50 threshold in January and December
(according to revised data) and worse still, the recent trajectory
has been a declining one. (A reading below 50 indicates that more
industries are losing jobs than are gaining; a reading above 50
suggests the opposite).
December marked the 41st consecutive monthly drop in manufacturing
payrolls, albeit the pace of decline is now much lower. The
manufacturing workweek also increased in December. The unusually
strong readings on the employment indices of the purchasing
managers' surveys suggest that job losses in this sector will abate
soon and modest gains are imminent.
The unemployment rate also edged down to 5.6%. Both the labor force
and the number of employed rose during the month; the latter,
however, rose by a greater amount pushing down the unemployment
rate. The revisions have clearly not settled the recent dichotomy
between the household and payroll data. |
