First, the bad news: unemployment is still at 10 percent and the economy is still recording job losses.
What's the good news? The drop in employment last month was only 11,000 jobs lost. Ordinarily, in a good economy, we should be seeing job growth, not job losses.
What's good about this is that this is the smallest monthly job loss figure since late 2007, and it wasn't as bad as economists had predicted.
At Slate.com, Leonard Gross writes today that there are four positive signs to be found in the numbers:
1. It looks like the government has been "understating the strength of the recovery." When each month's report comes out, the figures for the two previous months are revised. The estimates are changed simply because a few months down the road, they have better data. Looking back, the September job loss figure was 17% too high. The October figure represented a 22% overestimate.
There is reason to believe that this represents a genuine reporting trend, and it may turn out that there was actually a gain in jobs in November. The excitement is that the November job loss is only about 5% of the size of the original October number. We're moving in the right direction.
2. The service sector is starting to take off. The news is still bad for those in housing, construction and manufacturing. For those workers, things could still get worse. But service jobs (health, education and government, and business and professional services) are the dominant sources of employment. In these sectors, there has actually been meaningful growth over the past few months. Representing 86% of total payroll jobs, it will be the service sector that leads us into recovery.
3. The demand for temporary workers is up and their numbers are growing. When things look bad, companies lay people off and make the survivors work harder. When things start to stabilize and look up, they bring in the temporary workers. It takes a few quarters of positive growth before companies will trust the trend and commit to hiring permanent staff. The good news here is that when companies increase the number of temp workers, it's a signal that we're on the right path.
4. More people say they're working. In addition to the payroll figures, the Labor Department also reports how many people say they're working. If people say they're working when the economy shows job losses, politicians can say that they're not in the office because they've started working for themselves. For the last few years, both numbers have been down and there has been no way to say that there is any kind of silver lining. In November, a lot more people said that they are making money somehow (consulting, contracting, starting a business, self-employed) and as noted, the bleeding of payroll jobs seems to have ended. With both numbers up, that's a good sign that we may have reached the turning point.
One swallow doesn't make a summer, and one positive report doesn't mean that winter is over. But right now, it looks like things will be brighter in 2010.
Copyright, Cici Mattiuzzi