January 01, 2011 marked the beginning of a new year and a fresh start for unemployment. Unemployment figures, released the first Friday of every month, are a strong indicator of how the economy is doing and where it is headed.
After an unexpected rise from 9.6 percent to 9.8 percent unemployed in November, many were worried about the step back our economic recovery seemed to take. December brought the figure back to where it should be at 9.4 percent. When January came around with a bigger drop than just .01% many were surprised and others were speculative. Unemployment in January fell to 9.0% which was good news for many, but unfortunately the job creation rate was a meager 36,000.
January Employment Situation Summary
After Obama’s 2011 State of the Union Address some Americans were left hopeful while others skeptical. The President toldAmericans there was a need to freeze domestic spending and deep cuts to excessive spending. He also asked millionaires to give up their tax break in order to help the budget. Even with the expected savings of $400 billion through these provisions, many pointed out there was still more that the economy needed. The $400 billion will not be able to make much of a dent in the 6.2 trillion of debt expected to accumulate in the upcoming years.
Analysts do not think that we can really look at one specific month to see what is going on, in stead it more beneficial to analyze months in groups of threes. January’s 9.0% is the lowest January unemployment rate since the 90’s.
Category Dec. 2010 Jan. 2011 Change
Unemployment 9.4% 9.0% .4%
Jobs 103,000 36,000 -67,000
Category Dec. 2010 Jan. 2011 Change Industry Growth
Unemployment 9.4% 9.0% .4% Manufacturing +49,000
Jobs 103,000 36,000 -67,000 Retail +28,000
Health Care +11,000 Construction -32,000 Transportation and Warehousing -38,000 Professional and Business Services -11,000
A lot of factors go into affect when analyzing these numbers. The weather especially affected things like average weekly hours and construction work. It will not be certain until February exactly how much the weather affect the jobs. Over all, the fact that unemployment fell with such sever weather is a positive thing.
Analysts are hopeful for the future. Some think that the payroll tax cuts instated by Obama will help boost consumer spending which will ultimately speed up the job growth which has been lagging this month.