Since the reported number of actual jobs created was relatively small (36,000), the real change in the headline number came about as a result of the reduction in the number of unemployed being reported (590,000), and a decline in the labor force.
The jobless rate declined as the number of unemployed fell by 590,000. A 162,000 drop in the size of the labor force also helped push down the rate.
This requires greater scrutiny of the data; things may not be as rosy as they appear. It may only indicate that the labor market has firmed up for those who now have jobs, but the numbers of those who have been out of work for at least a year remain high...they're just no longer being reported because it's thought that after a year they're no longer looking for work.
However, since the 'under-employment' figures are reported to have decreased too, more investigation into the data needs to be done to better understand the employment picture. Time to check in with shadowstats.com...
The so-called underemployment rate -- which includes part- time workers who'd prefer a full-time position and people who want work but have given up looking -- decreased to 16.1 percent from 16.7 percent.
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I think the likelihood is high that this number will be revised in the next month or so. Winter weather impeded the gathering of data during the survey week.
A storm that spread from the Midwest and the South to New England during the week covered by the Labor Department's employer survey likely depressed January numbers as businesses temporarily closed.
Bad weather prevented 707,000 Americans from going to work in the January survey week, the Labor Department's survey of households showed today. That compares with an average of 282,000 over the previous five Januarys.
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