Something for Everyone

in the January employment report from the BLS, which came out today.

For the optimists:

• The unemployment rate fell from 10% to 9.7%
• Labor force participation edged upward, from 64.7% to 64.8%
• U-6, the broadest measure of un- and under-employment, which includes discouraged workers and persons working part-time who would prefer to be full-time, fell from 17.3% to 16.5%
• Average weekly hours increased from 33.8 to 33.9
• Manufacturing employment increased by 11,000

For the pessimists:

• Nonfarm payroll employment decreased by 20,000
• A revision to last year's figures reduced the estimate of total employment as of December 2009 downward by 1.36 million. At Econbrowser, Menzie Chinn plotted the old versus revised numbers:

(Seasonally adjusted nonfarm payroll employment (thousands))

• Every January sees a spike in unemployment, which is removed by the seasonal adjustment made by the BLS. The unadjusted unemployment rate is 10.6%.

As for what this says about policy - the economy is much better off than it would be under a counter-factual of no stimulus recovery act. David Leonhardt writes:

[A] big part of it is the stimulus bill passed last year. All the well-known private economic research firms estimate that it’s had a huge impact. IHS Global Insight, for instance, says the economy has about 1.7 million more jobs today than it would have had without the stimulus.

But things could have been better, if the stimulus had been bigger - as Free Exchange reminds us, a year ago, the new administration was considering up to $1.2 billion, and that was based on forecasts that proved too optimistic.

N.B.: The reason for the disparity between the movements in the unemployment rate and in payroll employment is that they are generated from different sources; the former from a survey of households and the later from a survey of businesses.