In a Snowy January, Job Numbers Fail to Take Off

By MOTOKO RICH

Published: February 4, 2011 - New York Times

The United States labor market is still having trouble achieving liftoff.

Payrolls expanded by 36,000 jobs in January, a sharp decline from recent months and well below consensus forecasts.

But the picture painted by the Department of Labor’s monthly snapshot of the job market was confounded by a drop in the unemployment rate to 9 percent, the lowest it has been since April 2009. That was mainly because that rate is calculated using a different survey than the payroll data.

January’s snowstorms probably had some effect on the anemic numbers, given that sectors like construction and transportation and warehousing shed jobs. The private sector added 50,000 jobs, so government layoffs, particularly at the state and local level, also restrained growth. Analysts had forecast an increase of about 145,000.

The mixed employment report came in a week when a mosaic of other indicators suggested a more upbeat outlook for the recovery. A closely watched survey of purchasing managers rose to its highest level since May 2004, and chain store sales increased at a faster pace than expected in January. On average, jobless claims have also been trending downward.

As a result, some economists said they would largely disregard January’s data because of the snowstorms. Others, however, cautioned that underlying job growth was still not robust.

“You can blame weather for the number being as low as it is,” said Steve Blitz, a senior economist for ITG Investment Research. “But even if you abstracted out the weather, you’re still not getting the dynamic job growth that is going to cut the unemployment rate significantly.”

A broader measure of unemployment, which includes those whose hours have been cut, those who are working part-time because they could not find full-time jobs, and those so discouraged that they have given up on the search, was 16.1 percent, down from 16.7 percent in December. That left 13.9 million people still out of work.

For the unemployed, the slow addition of jobs is growing increasingly frustrating. Andrew Stettner, deputy director of the National Employment Law Project, said that given growth in corporate profits, “this is when we need to see jobs growing hand over fist.”

A few sectors are picking up. Health care and retail added jobs, and manufacturing, a highlight of the recovery so far, added 49,000 jobs last month.

Economists noted that average weekly earnings increased to $959.45 for manufacturing workers, and an index of average weekly hours was also up. “Those firms are working the people they have harder,” Heather Boushey, senior economist at the liberal Center for American Progress, said . “And they will have to bring in new employees.”

Indeed, Cliff Waldman, economist at the Manufacturers Alliance/MAPI, noted that companies could be adding more jobs but were actually having some trouble filling slots that required workers with more skills.

“The modern manufacturing sector requires a different kind of worker than the manufacturing sector of 20 years ago,” Mr. Waldman said. “They have to be more literate, better at math, and able to work in teams.”

That does not bode well for those who have fewer skills and less education. The disproportionate burden that the grim labor market has imposed on the less skilled remained pronounced in January’s numbers. The unemployment rate among those with less than a high school diploma was 14.2 percent, while the rate among those with a bachelor’s degree or higher was 4.2 percent.

Recruiters and staffing companies underscored the fact that employers that are currently hiring are looking to fill slots that generally require candidates with college degrees.

Evan Davis, chief operating officer of MRI Network, which has 700 franchised recruiting offices throughout the United States, said that the company had seen a strong increase in postings for information technology, engineering and health care jobs. In fact, Mr. Davis said, some employers were having a difficult time hiring for such openings.

“It’s actually hard to meet the demand that’s out there,” he said. “It’s really hard to find top talent.”

Michael Bove, who recently secured a job in San Antonio helping sports teams work with ticketing software a year after he was laid off as a manager with a soccer team in Houston, said he could not imagine what it would be like to search for a job if he did not have his college degree.

“You hear stories of the people who are in their mid-40s or early 50s that have been working 20 or 25 years as bank branch managers or I.T. people and have all this experience but now they’re out there competing for entry level positions that in the past might go to someone doesn’t have a college degree,” Mr. Bove, 30, said. “Now companies can pick and choose who they want.”

The Labor Department’s monthly snapshot also included its annual “benchmark revisions,” which suggested that job growth during 2010 was actually lower than originally reported.

The report included upward revisions to November and December’s numbers, lifting job creation in November to 93,000 from 71,000, and in December to 121,000 from 103,000.

Elsewhere, temporary help, which had been strong throughout 2010, actually lost 11,400 jobs, and construction lagged, shedding 32,000 jobs.

Economists noted that job growth would not truly hit the kinds of levels needed to seriously dent the unemployment rate until employers beyond a handful of industries started hiring in earnest. Construction, which was among the hardest hit during the recession, has also not revived.

“It’s very brutal in our industry,” said Brantley Barrow, chairman of Hardin Construction, a builder of office buildings, malls and hotels based in Atlanta. “Even though the general economy is getting better, it’s going to be another year or two before things start to improve in our industry.”

The numbers underscored the assessment of the Federal Reserve chairman, Ben S. Bernanke, who said on Thursday that “until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established.”