Austan Goolsby on the Jan.

Employment Report
Posted by Austan Goolsbee on February 04, 2011 at Council of Economic Advisers website
Today’s employment report shows that the unemployment rate fell sharply to 9.0 percent and private
sector payrolls increased by 50,000 in January. Revisions to private sector payroll data show that 1.1
million jobs were added during 2010, the strongest private sector job growth since 2006. The 0.8 per-
centage point decline in the unemployment rate over the past two months is a welcome development;
however, the rate remains unacceptably high.
The overall trend of economic data in recent months has been encouraging, as initiatives put in place by
this Administration are taking hold, but there is still considerable work to do. Today, the Administration
puts forward our comprehensive innovation agenda, which details our efforts to accelerate American
leadership in educating our workers, investing in science, and building the infrastructure our companies
need to succeed. Innovation will be a key driver of the economy as we strengthen America’s position as
home to the world’s best new businesses and industries, and the best jobs.
In addition to the increases last month, the estimates of private sector job growth for November (now
+128,000) and December (now +139,000) were revised up. These revisions, along with the annual pay-
roll survey revisions, show that
private sector employment has now
grown for eleven consecutive months.
Overall payroll employment rose by
36,000 last month. Among the sectors
with the largest payroll employment
growth were manufacturing
(+49,000), retail and wholesale trade
(+36,700), and professional and
business services (+31,000).
Transportation and warehousing (-
38,000), construction (-32,000), fi-
nance (-10,000), and local
government (-10,000) were among
the sectors that subtracted from the
total. Severe weather in some parts of
the country may have impacted
employment and hours in some industries.
The 0.4 percentage point decline in the unemployment rate to 9.0 percent in January was accounted for
by a large increase in employment as measured by the household survey (which is separate from the
payroll survey). The labor force participation rate was unchanged.
The overall trajectory of the economy has improved dramatically over the past two years, but there will
surely be bumps in the road ahead. The monthly employment and unemployment numbers are volatile
and employment estimates are subject to substantial revision. Therefore, as the Administration always
stresses, it is important not to read too much into any one monthly report.

Austan Goolsbee is Chairman of the Council of Economic Advisers