Unemployment Rate Tumbles but Where are the Jobs?

Yesterday's employment report for January 2011 was a puzzler. The unemployment rate fell to 9.0 percent from 9.4 percent and the underemployment rate (that includes discouraged workers and those working fewer hours than they want) fell to 16.1% from 16.7%. On the other hand, while there was robust job growth in the durable manufacturing sector the economy as a whole just added 36,000 new jobs in Janaury. The data on the unemployment rate and the number of net new jobs are drawn from two different surveys. Snow during the survey week likely had an impact on the job creation number since so many workers were unable to get to work during the survey week (e.g. messangers and couriers and construction workres). Nevertheless, we have now had 21 months of an elevated unemployment at 9 % or more -- the longest time period since 1948 when these data were first collected. Monthly job creation has to be 10 times greater than January's number to begin to make a significant impact on the 8.75 million workers who have lost their jobs over the recession.