Last Friday, the eagerly awaited January jobs report came out, and it was, frankly, a bit of a flop. The unemployment rate did shrink 0.4 percentage points from 9.4% in December 2010 to a flat 9% in January 2011. But the economy added only 36,000 jobs during the month, far short of the 145,000 that were expected.

"The recovery in jobs has been very anemic. We're not doing as well as we ordinarily do during a recovery," says Hugh Johnson, an economist and the chief investment officer of Hugh Johnson Advisors in Albany, N.Y. "The economy cannot grow by adding just 36,000 jobs a month."

If you have a job, you may be thinking that none of this means a whole lot to you. Or maybe you know it means something, but you're not sure what. So, that's what I'm here to do: break it down and explain what you need to know.

Key Gauges of Economic Health

Job growth and unemployment are both key gauges when it comes to judging the economy's overall health. "They are one of the measures as to how the economy is doing, and they can give people either a high level of comfort or a low level of comfort. In other words, if you have a job, will you still have one in six months or a year? Are we headed in the right direction?" explains Johnson.

During this downturn, the unemployment rate peaked at 10.1% in October 2009. A rate of 4% to 6% is considered healthy.

As far as job growth goes, it's plain to see that adding 36,000 jobs a month isn't enough. But what is?

The answer comes down to careful math. "You're looking at how many jobs you need to add each month to make up for the 8.3 million losses during the crisis -- and how many jobs we have to add to make up for those losses by the end of 2012," says Johnson. This isn't a calculation you need to do, but let's just say we need to be adding closer to 300,000 a month.

Keep Your Job

One thing about these numbers is pretty obvious: Jobs are still few and far between. Although we're certainly making progress, it's clearly going to take a while, so you should stay put unless you already have another offer.

We're not seeing as many layoffs as we once were, but they're still a possibility. That means you need to be doing your best to make your company, and your boss, see that you're a vital part of the business.

It also means that having a hefty emergency fund -- enough to cover six to nine months' worth of expenses – continues to be crucial, in good economies and bad. And if you're among the unemployed, look to industries that are growing: technology, health care and education top the list.

Hold On to Your Investments

Slow job growth can actually be good for your portfolio, says Johnson. "It is, in a perverted way, good news for investments that employment isn't growing too rapidly and taking too big of a cut out of profits. Companies are not hiring many workers, and therefore more of their revenue goes right to the bottom line in the form of profit."

As the economy continues to add jobs -- and Johnson says we're going to start picking up speed in February, when he predicts we'll see a "very good number" -- people will start feeling more secure, which means they'll spend more money. More spending leads to more jobs, and slowly, we'll pull ourselves out of this mess.

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May 29 2011 at 1:24 AM Report abuse rate up rate down Reply

I dont think that they are counting all the people that have ran out of there unemployment and no longer have anything !! Lost there homes no medical ect

March 04 2011 at 10:03 AM Report abuse rate up rate down Reply


February 14 2011 at 11:56 AM Report abuse rate up rate down Reply

Yep, if you have a good job (even though you may not be happy), do your best to keep it. I have been unemployed for over a year now and I am a "shining" example to all of my employed friends that they should bend over backwards for their employers! Of course that means that your boss can treat you like you-know-what and you will put up with it because you are scared of losing your job. That's not good. It's a very screwed-up job market we have right now.

February 14 2011 at 11:25 AM Report abuse rate up rate down Reply
2 replies to pj512's comment

yes indeed...the DMV and Unemployment office SEATWARMERS are far more congenial...right????

February 14 2011 at 12:30 PM Report abuse rate up rate down Reply

As far as I know there's no law against searching for a better job while you're still in a lousy job that you're "scared of losing".

February 14 2011 at 3:36 PM Report abuse rate up rate down Reply

The job figures are massaged to show a fantasy picture. First, the unemployeds who gave up searching stop "existing". Second, hired ones are handled as "independent contractors", not really employees while being handled as slaves. Third, plenty of emplyers, keep hiring, not paying salaries when due and replacing the quitting unpaid employee with another desperate sucker. Hence, the corporate profits we see: no paycheck, no Fica, no insurance, no taxes. Savings!

February 14 2011 at 11:06 AM Report abuse rate up rate down Reply

Lets see, 36,000 people managed to find a job in January thats about what? 1 person for every 5 counties in this country, I wonder how many of these jobs were at minimum wage? but hey don't worry there still laughing and back slapping on wall street. there even giving out bonuses @ GM & Chrysler with tax payer dollars no less. are you getting the idea it might be time for our own Egyptian picnic.

February 14 2011 at 10:52 AM Report abuse rate up rate down Reply

Thanks to the unions that supported N.A.F.T.A our jobs went to other countries.

February 14 2011 at 9:33 AM Report abuse +1 rate up rate down Reply

Here's the deal, If they reported the true numbers of the unemployment in this country I might care, might!!!

February 14 2011 at 9:20 AM Report abuse +1 rate up rate down Reply
1 reply to cefntx's comment

17 % is the real number.

February 14 2011 at 9:43 AM Report abuse +2 rate up rate down Reply

Generally I do not post on articles, but I would like to say that this blog really forced me to do so! Thanks, really nice blog."=

February 14 2011 at 2:30 AM Report abuse -3 rate up rate down Reply

The "slight decline" in unemployment numbers is absolute b.s. and very, very misleading at best ... it's actually an outright lie because the figures are arrived at by the number of people COLLECTING UNEMPLOYMENT BENIFITS. People are "not counted ANYLONGER" as "STILL unemployed" WHEN THEIR BENIFITS RUN OUT & THEY CANT COLLECT ANY LONGER AND HAVE GIVEN UP LOOKING. It also messes up the so called 36,000 jobs added. Smoke and mirrors people, smoke and mirrors - I know what pipe the smoke is blowing out of. The jobs are not comming back & that is the truth.

February 13 2011 at 10:44 PM Report abuse +7 rate up rate down Reply
1 reply to teampdf's comment

No American president has ever been re-elected with unemployment above 8%.
It's a safe bet that in the future with even more Americans out of work, they will have that unemployment percentage "fudged" down below 8% by the time the polls open in 2 years. I'm guessing it'll be about 7.8%

February 13 2011 at 10:55 PM Report abuse +7 rate up rate down Reply