by Calculated Risk on 2/01/2008 09:40:00 AM

From the BLS: Employment Situation Summary

Both nonfarm payroll employment, at 138.1 million, and the unemployment rate, at 4.9 percent, were essentially unchanged in January, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The small January movement in nonfarm payroll employment (-17,000) reflected declines in construction and manufacturing and job growth in health care.

Click on graph for larger image.

Residential construction employment declined 28,100 in December, and including downward revisions to previous months, is down 375.3 thousand, or about 10.9%, from the peak in February 2006. (compared to housing starts off about 50%).

The second graph shows the unemployment rate and the year-over-year change in employment vs. recessions.


Although unemployment was slightly lower, the rise in unemployment, from a cycle low of 4.4% to 4.9% is a recession warning.

Also concerning is the YoY change in employment is less than 1%, also suggesting a recession.

Overall this is a very weak report, especially including the downward revisions to prior months (although December was revised up).