TGIF. I am convinced that the groundhog jinxed us – what other explanation could there possibly be for my thermometer displaying a below-freezing temperature this morning for the first time in several days?
On the jobs report, I’ll cut right to the chase: this one caught everyone off-guard, and in the best way possible. As of 8 a.m. this morning, a half hour before the scheduled release of the January employment report, the experts were calling for anywhere from 95,000 to 180,000 net jobs added last month. At the low end, that would have represented a major setback; at the higher end, it would have been encouraging but still not the number we were hoping for.
It turns out everyone (except the groundhog) was wrong. The U.S. economy added a whopping 243,000 jobs in January, bringing the employment rate down to 8.3% from 8.5% last month and 8.7% in November. The private sector job count was 257,000. Gains were spread across manufacturing, professional and business services, and leisure and hospitality. The Labor Department also revised the November and December jobs numbers, saying the economy added 60,000 more jobs in those two months than was initially thought.
This, folks, is very big. The last time this few people were unemployed, it was February of 2009 and President Obama had just taken office. That’s not to say we’re back to operating at full-steam: underemployment – or the measure of people who are working less and earning less than they would ideally like to be – is still high (18.8%, according to Gallup’s daily polls).
Closer to home there is reason to be concerned as well. In the Hudson Valley, the unemployment rate actually increased in December, and while January jobs numbers won’t come out for another couple of weeks, the signs are not looking good. The job recovery has slowed in our neighborhood – and for a crystal-clear (and unavoidable) reason: because we put most of our eggs in a rotten basket.
Health care and biotech have been huge in Westchester and the Hudson Valley. The leisure and hospitality industry is doing better than it has in years. But the beating heart of the Westchester economy is the securities industry and those it employs. And therein lies the problem.
According to a report from New York State Comptroller Thomas DiNapoli, the securities industry lost $3 billion in the third quarter and posted similarly weak earnings in the fourth quarter. There have been 4,300 jobs lost in the industry since last April.
New York has posted a net loss of 11,200 private sector jobs since July, according to the report, and the average salaries of the jobs created in the past two years is more than 40% lower than the average salaries of the jobs lost in the state during the recession. The government sector has shed 29,300 jobs over the last two years, and the state’s GDP is expected to grow by just 1.7% in 2012 – below the expected 2%+ national GDP growth.
So while today’s job report is something to celebrate, know that here in New York, there is still a long recovery ahead.