2011 Economic Calendar
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Employment Situation  
Released On 1/7/2011 8:30:00 AM For Dec, 2010
PriorPrior RevisedConsensusConsensus RangeActual
Nonfarm Payrolls - M/M change39,000 71,000 160,000 98,000  to 225,000 103,000 
Unemployment Rate - Level9.8 %9.7 %9.6 % to 9.8 %9.4 %
Private Payrolls - M/M change50,000 79,000 180,000 108,000  to 235,000 113,000 
Average Hourly Earnings - M/M change0.0 %0.1 %0.1 % to 0.2 %0.1 %
Av Workweek - All Employees34.3 hrs34.3 hrs34.3 hrs to 34.4 hrs34.3 hrs
Nonfarm Payroll - level130.539 millions

Highlights
Today's report was mixed with payroll jobs underperforming and the unemployment rate unexpectedly dropping. Unfortunately, the payroll number is more credible and the rate decline is likely an aberration. Overall payroll employment in December gained 103,000, following a revised 71,000 rise in November and a 210,000 boost in October. The December advance came in significantly below analysts' estimate for a 160,000 gain. However, the October and November revisions were up net 70,000. Private sector payrolls increased 113,000 in December, following a 79,000 advance the month before. The consensus expected an 180,000 boost.

For the latest month, strength was in private service-providing jobs which rose 115,000 after an 84,000 increase in November. Good-producing jobs declined 2,000, following a 5,000 decrease in November. In December, manufacturing grew 10,000; construction fell 16,000; and mining rose 3,000. Government jobs fell 10,000, following an 8,000 dip in November.

Within private services for December, leisure and hospitality increased by 47,000 while health care rose 36,000. Also, professional & business services gained 7,000 and were led by temp hiring, up 16,000.

The drop in government jobs was led by a 20,000 fall in local government, with non-education declining 12,000. Federal employment increased 10,000 while state government jobs were unchanged.

Wage inflation remains anemic. Average hourly earnings in December edged up 0.1 percent, following no change the previous month. The December number matched the market median forecast for a 0.1 percent increase. The average workweek for all workers was unchanged at 34.3 hours, equaling expectations.

On a year-ago basis, overall payroll job growth improved to up 0.9 percent in December from up 0.7 percent the prior month.

Turning to the household survey, the unemployment rate unexpectedly fell to 9.4 percent from 9.8 percent in November. Analysts had called for 9.7 percent. The rate declined in part due to a notable drop in the labor force, suggesting the unemployment rate will rebound when discouraged workers return.

Today's report clearly is disappointing and takes some wind out of the sails of the consumer sector. While many indicators have been strengthening, the lack of improved momentum in the labor market will likely constrain overall resurgence for the economy. On the news, equity futures eased, the dollar dipped, and interest rates slipped.

Consensus Outlook
IMPORTANT NOTE: The consensus forecasts for overall and private payrolls were updated Thursday January 6 after the jobless claims report and also Wednesday's strong ADP report.

Nonfarm payroll employment for November was unexpectedly soft, rising a very modest 39,000, following a 172,000 boost in October. Private sector payrolls increased 50,000 in November, following a 160,000 boost the month before. Average hourly earnings were flat in November after rising 0.3 percent the prior month. The average workweek for all workers was unchanged at an as-expected 34.3 hours. As many economists have been expecting, the unemployment rate turned up, rising to 9.8 percent from 9.6 percent in October. Looking ahead, jobless claims have been declining and suggest some improvement in the labor market. However, just because firms are laying off at a reduced rate does not mean hiring is picking up. And the unemployment rate likely is still under upward pressure from re-entrants to the labor force. But the latest jump in ADP's private payroll estimate at 297,000 for December has raised expectations.

Definition
The most closely watched of all economic indicators, the employment situation is a set of monthly labor market indicators based on two separate reports: the establishment survey which tracks 650,000 worksites and offers the nonfarm payroll and average hourly earnings headlines and the household survey which interviews 60,000 households and generates the unemployment rate.

Nonfarm payrolls track the number of part-time and full-time employees in both business and government. Average hourly earnings track employee pay while the average workweek, also part of the establishment survey, tracks the number of hours worked. The report's private payroll measure excludes government workers.

The unemployment rate measures the number of unemployed as a percentage of the labor force. In order to be counted as unemployed, one must be actively looking for work. Other commonly known data from the household survey include the labor supply and discouraged workers.  Why Investors Care
 
[Chart]
During the mature phase of an economic expansion, monthly payrolls gains of 150,000 or so are considered relatively healthy. In the early stages of recovery though, gains are expected to surpass 250,000 per month.
Data Source: Haver Analytics
 
[Chart]
The civilian unemployment rate is a lagging indicator of economic activity. During a recession, many people leave the labor force entirely, so the jobless rate may not increase as much as expected. This means that the jobless rate may continue to increase in the early stages of recovery because more people are returning to the labor force as they believe they will be able to find work. The civilian unemployment rate tends towards greater stability than payroll employment on a monthly basis. It reveals the degree to which labor resources are utilized in the economy.
Data Source: Haver Analytics
 
 

2011 Release Schedule
Released On: 1/72/43/44/15/66/37/88/59/210/711/412/2
Release For: DecJanFebMarAprMayJunJulAugSepOctNov
 


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