It's OK to be optimistic

John Burns

Over the next three months, the U.S. Census Bureau is going to hire about 1.2 million temporary workers. The seasonally adjusted impact of these numbers will be massive, so don't overreact positively when the news makes headlines a few months from now.

Nonetheless, we believe that positive job creation is getting ready to occur as most of the leading indicators point to solid growth ahead, and recent job loss figures have been only slightly negative. Job creation is going to be driven by big companies who have downsized significantly, as well as small businesses who will slowly return to growth mode.

Since the length of unemployment in the labor force is still hovering near 30 weeks, (the record high since the Bureau of Labor Statistics began tracking the statistic in 1948), we also believe that job-growth-focused government stimulus will continue.

Methodology

1. We collect a complete history on 70-plus variables and forecast the important ones by forecasting each metropolitan statistical area (MSA) and rolling it up.

2. In this monthly e-mail, we publish the current stats along with the historical minimums, maximums and averages as a service to the industry.

3. Each indicator is graded based on a bell curve where an "A" is its historical best, a "C" is its historical average, and an "F" is its historical worst. The grades are designed to provide a simple tool for decision-makers to scan the data.

4. Each of the eight categories has a grade that is nothing more than the average of the grades under it.

Economic Growth: D+

Overall economic growth was about the same this month compared to last, and the results for our economic growth metrics were mixed. The revised fourth-quarter gross domestic product growth rate increased to 5.9 percent from the preliminary estimate of 5.7 percent. Much of the growth was still the result of recent government stimulus and an increase in inventories.

The pace of job losses also eased this month, although in the last 12 months the United States has lost 3.24 million jobs, which is equal to a decline of 2.5 percent of the total payroll workforce.

The unemployment rate remained flat this month at 9.7 percent, while the broader measure of unemployment, the U-6, increased to 16.8 percent. (According to the bureau, the U-6 includes two groups that the U-3, which is the typical unemployment rate, does not: "marginally attached" -- i.e., discouraged -- workers and those employed part time for economic reasons.)

The length of unemployment in the labor force declined slightly to just under 30 weeks this month, yet remains the second-highest month on record since the BLS began tracking the statistic in 1948. Personal income improved in January and has returned to positive year-over-year growth for the first time since December 2008, increasing by 1.1 percent.

The Consumer Price Index (all items) decreased to 2.6 percent from one year ago, while the Core CPI (minus food and energy) also dropped to 1.6 percent.

Leading Indicators: C

Overall leading indicators held relatively steady this month, but several individual metrics actually improved. The Leading Economic Index six-month growth rate declined in January to 9.8 percent from 12.2 percent last month, and remains very high compared to history. ...CONTINUED

All rights reserved. This content may not be used or reproduced in any manner whatsoever, in part or in whole, without written permission of Inman News. Use of this content without permission is a violation of federal copyright law.