Job growth underwhelming, but unemployment rate falls to 9%

JOB GROWTH UNDERWHELMING, BUT UNEMPLOYMENT RATE FALLS TO 9%…. Expectations for a stronger 2011 are fairly common, which makes it all the more discouraging that January’s job numbers were so underwhelming, getting the year off to a weak start.

The unemployment rate dropped sharply last month to 9 percent, the lowest level in nearly two years. But the economy generated only 36,000 net new jobs, the fewest in four months.

The January report illustrates how job growth remains the economy’s weakest spot, even as other economic indicators point to a recovery that is strengthening..

Friday’s report offered a conflicting picture on hiring. Unemployment fell because the Labor Department’s household survey determined that more than a half-million people without jobs found work. The department conducts a separate survey of businesses, which showed tepid job creation.

Many of the early reports suggest harsh winter storms throughout much of the country in January disrupted businesses and industries, reducing job totals.

On a slightly more encouraging note, the totals from November and December were both revised upwards, with November’s totals revised to 93,000, up from 71,000, and December’s totals revised to 121,000 from 103,000.

In case it’s not obvious, the decline in the unemployment rate is nice, but the increase of only 36,000 jobs isn’t nearly good enough. The number is far short of expectations, and a small fraction of what’s needed to get us back to where we need to be.

Once again, here’s the homemade chart I run on the first Friday of every month, showing monthly job losses since the start of the Great Recession. The image makes a distinction — red columns point to monthly job totals under the Bush administration, while blue columns point to job totals under the Obama administration.

jobs_jan11.jpg

Note: the new report published by the Bureau of Labor Statistics includes recalculated data for every month in calendar year 2010. This chart reflects the revised data.