By Mark Huffman
ConsumerAffairs.Com
September 3, 2010
Over the last two weeks there have been a number of small, hopeful
signs of an improving economy, but today's August jobs reports shows
the unemployment rate inched back up to 9.6 percent. But a closer look
at the number reveals an interesting trend.
Overall, the economy lost 54,000 jobs last month, but that was due to job cuts by federal, state and local governments. The last of the temporary Census Bureau jobs went away last month.
Private sector job rolls, meanwhile, increased by 67,000 -- ordinarily nothing to really cheer about -- but in this economy, a somewhat hopeful sign. For months, the private sector has been eliminating jobs. The good news is that companies are restoring them.
"Unfortunately, companies are doing so at an extremely cautious pace," said Joel Naroff, chief economist at Naroff Economic Advisors, in Holland, Pa.
Naroff focused on what he called one bit of good news: revisions to July's numbers show a larger increase in business hiring. That often means payroll gains are accelerating over the month. He says August's numbers could be revised upward as well.
Private sector rebounds
"While the manufacturing purchasing managers were saying they were hiring, the government claimed they were cutting payrolls," Naroff said. "The long, declining construction sector posted a major rise in workers which was odd given the housing market problems. Solid gains were found in health care, hospitality and temporary workers. The state and local government budget messes led to further major layoffs."
The jobs report comes on the heels of a rise in consumer confidence, an increase in retail sales, a slight increase in home prices and increased consumer spending. The fact that the unemployment rate rose from 9.5 percent to 9.6 percent might in itself be considered good news, Naroff says, because it indicates more people have rejoined the labor market and are actively seeking work.
"I noted many times in the past that I expected that to happen when people began to feel more confident they can find a job," Naroff said. "One month does not make a trend but if that continues, we could see further increases in the unemployment rate which the politicians will decry but most economists will cheer."
