Revisions Bring Silver Lining to Jobs Report
The U.S. economy added 157,000 jobs in January, according to the Labor Department. This was slightly below the median estimate of 160,000 economists polled by Thomson Reuters.
But the big surprise was the upward revisions to November and December payroll numbers. November’s jobs numbers were revised upward by 86,000 to 247,000 and December by 41,000 to 196,000.
“The numbers were up by a pretty extraordinary amount,” said Stifel Nicolaus portfolio manager Chad Morganlander. The revisions made to November and December payroll numbers are close to the 200,000-a-month growth rate needed for a healthy recovery, he said.
“The jobs market seems to be moving in the right direction,” Morganlander said.
“The upward revisions to last year are a reminder that one has to be skeptical about initial readings on the economy,” said UBS Chief Economist Maury Harris. He says the January report is good news for the private sector, particularly manufacturing.
But Morganlander warned we’re not out of the woods yet. While everyone is focused on the monthly numbers, “the private payrolls number has been lower or around where it was in 2001 and 2002.
"This is a structural issue for the U.S. labor force and U.S. economy,” Morganlander said. “The U.S. economy needs to retool itself and have private sector jobs grow in excess of where they were in the early 2000s.”
But Harris disagrees, “the focus should be where we are going from where we’ve recently been, not from where we were ten years ago,” he said. “The private sector is humming and will continue to do so unless politicians really foul up the public sector,” Harris said.