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Stronger than Expected Jobs Number
We actually got a bunch of economic data released today; apparently the shutdown no longer is affecting some of these newer releases, although we still have a bunch of old data that has yet to be released. I have a feeling that there is a lot of weak economic data that has yet to come out. Today we got some stronger than expected data including the January jobs number. They were looking for 158,000 jobs to be created, which would follow the 312,000 number that we got for December, which was a surprisingly strong number. So the consensus was that we would have a weaker number in January; but we ended up with 304,000 jobs allegedly being created in January.
December Jobs Number Revised Down 90,000 Jobs
But they now tell us that we didn’t create 312,000 jobs in December – we only created 222,000 jobs, which is still a pretty big number, but it’s 90,000 less. That’s a huge revision, to think that they were off by 90,000 jobs. Maybe they’re off by 90,000 jobs in January. I guess we’ll have to wait another month to find out. But that number was much bigger than what was expected; and of course, even if you take into consideration the revisions, it was still a better net number than what the markets were looking for.
U6 Went from 7.6% to 8.1%
The official unemployment rate rose to 4%. Part of that was because the Labor Force Participation Rate continued to notch up. It went from 63.1 to 63.2, and since more people are now looking for work, those people are now officially unemployed. But a bigger story than the official rate is the U6 rate, which is far more accurate if you want to get a real look at the U.S. labor market. Of course, it’s not 100% accurate because it only includes discouraged workers who have discouraged for under a year. So it doesn’t capture any of the long-term unemployed, which are a big part of the American labor market. But the U6 rate includes the short-term discouraged workers, but also the people who are working part time, but who really want to work full time. We had a surge, like half a million part-time jobs were added according to household survey during the month, so a lot of people working part time – they probably want to work full time, but they are settling for part time work. That meant that the U6 number went from 7.6 to 8.1.