The latest economic news out of Washington caused some head-scratching: The unemployment rate has dropped to 9% but only 36,000 jobs were created last month. Think about it. The government expected 145,000 new jobs to be created and the actual number fell way short. And yet the number of people considered unemployed was reduced.
Where did all those out of work people go, since it clearly wasn't to newly created jobs?The answer, offered by some of the greatest economic minds in the country, seems to be this: The snow kept the unemployed from looking for work and if you aren't actively looking for work in the job market, the government doesn't count you. As for the paltry number of new jobs created? Blame that on the weather too. We're betting that most of the 36,000 new jobs were snow shovelers and plow operators.
The lower unemployment rate, which the White House described as a "welcome development," actually is misleading -- snow or no snow. Every January, the Bureau of Labor Statistics updates its estimate of the U.S. population. This year, it dropped the population number by 347,000, which essentially makes it look like a greater percentage of people are working than if it had kept the population estimate steady. Cute, huh?
The unemployment rate fell from 9.4%, which is the second straight month of decreases. Back in November, when it was 9.8%, economists said it would take until the end of 2011 to hit the 9% mark. So instead of month 12, it happened in month one, again proving that maybe our economists don't actually know so much.
Here's about the truest interpretation of the data I could find, coming in a statement from White House Council of Economic Advisers Chairman Austan Goolsbee, who said, "It is important not to read too much into any one monthly report." Amen.
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