The Job Creation Index above is calculated by subtracting the percentage of employers who said they were more likely to let workers go from the percentage of employers more likely to hire and, in the case of North Dakota, those numbers were 8 percent and 42 percent respectively. Rhode Island had the lowest score of any state with just +4.

Perhaps more interesting than the above graphic is the well-being portion of Gallup’s State of the States survey, those of us living in the north central part of the country apparently a little better off when considering such factors as obesity, exercise, and diabetes.

North Dakota does pretty well on this measure too, ranking third behind Hawaii and Wyoming, though things don’t look too good in the rustbelt and the south (except for Georgia, for some reason), while Nevada stands alone as below average in the West.

This data release included benchmark revisions for prior data, the net result being an upward revision of more than 250,000 to nonfarm payrolls in recent years. Payrolls for 2011 alone were revised upward by 180,000, from a gain of 1.64 million to 1.82 million.

The unemployment rate has now fallen 0.8 percentage points since August as the number of jobless fell from 13.1 million in December to 12.8 million in January and the labor force participation rate was unchanged at 63.7 percent.

The broader U-6 measure of underemployment, include those who have given up looking for a job or have settled for part time work, fell from 15.2 percent to 15.1 percent.

Job growth was seen in all major private sector categories except for information and financial activities. Professional and technical services added 30,300 positions and there were 20,100 new temporary jobs, accounting for the bulk on the 70,000 increase for professional and business services.

Manufacturing payrolls rose by 50,000, largely due to hiring in metal products and machinery, while an increase of 44,000 in the leisure and hospitality sector was driven by a net gain of 32,800 workers at food service and drinking establishments.

Health care added its usual 30,000+ new jobs and overall government payrolls declined by 14,000, due largely to net job reduction of 11,000 at the local government level.

The CBO apparently tried to make this an apples-to-apples comparison by controlling for the many variables that affect wages and benefits and it seems to make sense – unless you’re a doctor or lawyer, you’re better compensated working for the gubment.

President Barack Obama jumped into a new social media format on Monday and, as if he doesn’t have enough to do, ended up promising a worried spouse to help find a job for her unemployed husband.

Obama got the assignment during a live-streamed interview organized by Google Plus, the online search giant’s new social networking site.

The forum was designed to show off Google Plus’ new “Hangout” feature, where several friends can video chat together.

“Industry tells me they don’t have enough highly-skilled engineers. If your husband is in that field, we should get his resume and I will forward it,” Obama told Jennifer Weddel of Fort Worth, Texas.
…
Obama seemed surprised to hear that a semiconductor engineer was unemployed.“I will follow up on this,” Obama said.

Well, hopefully he’s a “highly-skilled” (and highly-degreed) engineer and not just one of those folks who call themselves an engineer because they once manned a technical support phone line for Microsoft or somesuch. I can’t imagine what it would be like to still be working my old cubicle job – it’s coming up on five years now since I left that behind and, as each year goes by, it seems as though it’s another three years in the past.

The year 2011 will be remembered as the time when many ever-optimistic Americans began to give up hope. President John F Kennedy once said that a rising tide lifts all boats. But now, in the receding tide, Americans are beginning to see not only that those with taller masts had been lifted far higher, but also that many of the smaller boats had been dashed to pieces in their wake.

In that brief moment when the tide was indeed rising, millions of people believed that they might have a fair chance of realising the “American Dream”.

Now those dreams, too, are receding. By 2011, the savings of those who had lost their jobs in 2008 or 2009 had been spent. Unemployment cheques had run out. Headlines announcing new hiring – still not enough to keep pace with the number of those who would normally have entered the labour force – meant little to the 50-year-olds with little hope of ever holding a job again.

Indeed, middle-aged people who thought that they would be unemployed for a few months have now realised that they were, in fact, forcibly retired. Young people who graduated from college with tens of thousands of dollars of education debt cannot find any jobs at all.

It gets even more depressing the further you read, a point that should have been clear from the title – Many Americans gave up hope last year – 2012 will be worse – but, I couldn’t help think what it’s like for the millions of people my age who took a very different route through life, perhaps worsening their financial situation as a result of the housing bubble.

Gasoline prices that fell 2.0 percent from November to December combined with household energy costs that were down 0.4 percent to push the energy index 1.3 percent lower, however, energy prices remain up 6.6 percent from a year ago with many analysts now predicting a sharp increase in pump prices this spring.

Food & beverage prices rose 0.2 percent last month and were up 4.5 percent for all of 2011 while apparel prices declined 0.1 percent in December but gained 4.5 percent for the year in a report that was almost a carbon copy of the November data released a month ago.

In a separate report from the Labor Department, jobless claims plunged from an upwardly revised, seasonally adjusted 402,000 to 352,000 for the week ending January 14th, the lowest level since April 2008.

Claims for six states were estimated due to the Martin Luther King holiday and seasonal factors  are having an outsized impact on the data at this time of the year as unadjusted, holiday-related cutbacks came in at 521,613.

But, looking at the four-week moving average, the trend remains down, this smoother gauge of jobless claims falling from 382,500 to 379,000 last week, up from 374,000 at the end of last year.

But, does that make any sense?

Were those jobs really “lost” or should a good many of them have never existed in the first place?

Anyone with a rudimentary understanding of economics would conclude that, since many of the jobs created early in the decade were related to housing – construction workers, mortgage brokers, etc. – that they won’t be coming back anytime soon, at least not as long as the housing bubble remains “popped” (which is a pretty good bet over the next few years).

Of course, since the early-2000s housing boom was, effectively, the cure for the stock market boom that went bust at the turn of the century, one could argue that what the government and central bank need to do is create a new and different asset bubble.

But, so far, Fed Chief Ben Bernanke and crew seem to be shooting blanks.

In lieu of another asset bubble, maybe the nation ought to collectively lower its expectations about the labor market rather than harping about the unemployment rate all that time.

Hey, the U.S. had a pretty good run there in the 80s and 90s as one credit-fueled expansion followed another and then we had one last hurrah seven or eight years ago when even the nation’s brightest economists thought we were all going to be wealthy forever as a result of perpetually rising home prices.

But, now it seems pretty clear that we’ve run out of bubbles and maybe we should get used to the idea that the jobless rate will be high for a long time to come (think Europe) and that many of those eight million “lost” jobs were like that mid-2000s housing wealth – fleeting.

In fact, we should all probably stop calling them “lost” jobs and begin referring to them as what they really were – temporary jobs.

Temporary jobs that lasted as long as high home prices did.

Of course, this is a tough sell for politicians visiting Main Street during this election year. In fact, the idea that those jobs aren’t coming back and that there’s nothing on the horizon to replace them might just dim even the most popular elected official’s chances at holding onto their seat and that’s probably why you won’t hear it.

Some politicians like to say “We need to level with the American people”.

Well, now would be a good time to level with the American people about jobs.

When looking at the data, it seems clear that, absent another Federal Reserve sponsored asset bubble, things don’t look good for the labor market.

Those of you who were around at the time might recall that Asha Bangalore at Northern Trust was one of the first to notice the increase in housing-related jobs early in the last decade, noting back in 2005 (see this related post at the time) that a whopping 43 percent of net payroll gains over the four prior years were housing related.

As shown below, that proved to be the culmination of a decade long boom in construction jobs (only interrupted for a few years as the internet bubble burst) and, relative to the U.S. population, we’re now back to levels that we’ve seen before after similar property busts in 1976, 1982, and 1991.

More than two million construction jobs were lost in 2008 and 2009, but that doesn’t mean these jobs should now come back since the recession ended – not until another property boom gets underway and, given the length of the last boom, that may take some time.

A similar story is seen, for example, in retail sales and finance where payrolls declined by a combined 1.5 million beginning in 2007 as shown below.

Clearly, while a growing population will require more clerks to ring up groceries and life’s other essentials – that’s part of the reason why retail trade jobs have rebounded – there’s no reason to think that all the cashier jobs that were created six or seven years ago (i.e., when everyone was out spending their home equity as fast as it grew) will be coming back.

As for payroll levels in the financial industry, we may have seen a generational high at 8.3 million back in 2007 because, if there’s one thing that we should have learned over the last few years, it is that we’d probably be better off with fewer people working in finance.

Just these three categories – construction, retail trade, and finance – account for nearly half of the eight million jobs that were “lost” in recent years, yet these same groups account for only about one-fifth of the entire U.S. workforce.

These jobs weren’t “lost”, in the sense that they’ll somehow be found again, that is, unless Ben Bernanke inflates another asset bubble.

In the public sector, state and local governments have born the brunt of the bad U.S. economy, due in large part to their lack of a printing press and the ability to keep piling on debt in amounts never witnessed before on planet earth. With a much larger workforce – a combined 19 million versus less than 3 million for the federal government – state government payrolls have declined by more that 125,000 since 2008 and local governments have seen net reductions of more than a half million.

But, still, it seems the federal government has some catching up to do.

An improving labor market and lower pump prices are no doubt major factors behind the recent rise that led to a surge in holiday sales as Americans renewed their decades long love affair with credit card debt (temporarily at least) as noted in this item yesterday.

While this is consistent with other measures of consumer confidence, it’s worth noting that, at -27, the latest Gallup poll readings are well below what might be considered “normal” as is the case for other gauges of  consumers’ mood that remain at “recession levels”.

Three basic issues are at play. One is that analysts aren’t making distinctions between leading, coincident and lagging data. The second issue is that there is little effort to measure the predictive strength of a given economic data point (or set of data points) in explaining subsequent movements in the economy. The third is that analysts seem to be forming expectations report-by-report (what I call a “stream of anecdotes” approach) instead of taking those reports in context of the full ensemble of data that is available at each point in time.

Let’s examine the seemingly most “compelling” data point first – the fact that December payrolls grew by 200,000. Surely that sort of number is inconsistent with an oncoming recession. Isn’t it? Well, examining the past 10 U.S. recessions, it turns out that payroll employment growth was positive in 8 of those 10 recessions in the very month that the recession began. These were not small numbers. The average payroll growth (scaled to the present labor force) translates to 200,000 new jobs in the month of the recession turn, and about 500,000 jobs during the preceding 3-month period. Indeed, of the 80% of these points that were positive, the average rate of payroll growth in the month of the turn was 0.20%, which presently translates to a payroll gain of 264,000 jobs.

Likewise, in 5 of the past 10 recessions, the ISM Purchasing Managers Index was greater than 50 just weeks before the recession began, and the new orders component of that index was greater than 50 in most cases, immediately prior to the recession. Very simply, neither a strong monthly employment gain nor a slight uptick in the PMI are informative signals that recession risk has eased.

As usual, there are some good charts in this piece along with an interesting discussion of the Conference Board’s Leading Economic Indicators.

Interestingly, with upwards of 70,000 job losses “baked into the cake” for the next labor report (due to poor seasonal adjustments in the “couriers and messengers” category as noted here and other data anomalies), a disappointing jobs report three-and-a-half weeks from now just might be enough to knock the wind out of consumers’ sails as they look over their credit card bills and regret having spent so much over the holidays (as noted here).