About That Latest Jobs Report

The Bureau of Labor Statistics (BLS) has released its latest jobs report and found that the unemployment rate dipped to 9.7% for January. However, it isn't all that it's cracked up to be.

The rate didn't dip because the economy was creating hundreds of thousands of new jobs, but because the BLS decided that they were undercounting the number of people who were looking for jobs. Therefore, the size of the potential workforce was larger by about half a million. That's why the rate dipped. "Unexpectedly"

Payrolls unexpectedly fell in January, but the unemployment rate surprisingly dropped to a five-month low, according to a government report on Friday that hinted at labor market improvement.

The Labor Department said the economy shed 20,000 jobs after losing 150,000 jobs in December. November was revised to a gain of 64,000, up from 4,000. Annual benchmark revisions to payrolls data showed the economy has purged 8.4 million jobs since the start of the recession in December 2007.

Analysts polled by Reuters had forecast payrolls gaining 5,000 and the unemployment rate to edge up to 10.1 percent in January from 10 percent. Median estimates from the top 20 forecasters expected payrolls to be unchanged last month.

"It shows net-net that we are seeing a slow improvement in the labor market. There are some encouraging signs in the report ... but it wasn't quite good enough to push us into positive territory just yet," said Boris Schlossberg, director of FX Research at GFT Forex in New York.

Here's how the BLS reported the news:

In January, the number of persons unemployed due to job loss decreased by
378,000 to 9.3 million. Nearly all of this decline occurred among permanent
job losers. (See table A-11.)

The number of long-term unemployed (those jobless for 27 weeks and over)
continued to trend up in January, reaching 6.3 million. Since the start of
the recession in December 2007, the number of long-term unemployed has risen
by 5.0 million. (See table A-12.)

In January, the civilian labor force participation rate was little changed at
64.7 percent. The employment-population ratio rose from 58.2 to 58.4 percent.
(See table A-1.)

The number of persons who worked part time for economic reasons (sometimes
referred to as involuntary part-time workers) fell from 9.2 to 8.3 million
in January. These individuals were working part time because their hours had
been cut back or because they were unable to find a full-time job. (See
table A-8.)

About 2.5 million persons were marginally attached to the labor force in
January, an increase of 409,000 from a year earlier.

Nonfarm payroll dropped every month in 2009 save November, where it inched up by 60,000. Every other month saw a loss of 38,000 to 101,000.