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2/9/2003

Few jobless, but don’t get worked up

The Washington Post

WASHINGTON — Joblessness fell in the U.S. in January as the nation added jobs, the Labor Department reported Friday — but economists cautioned that the strong numbers resulted more from seasonal fluctuations and technical changes than any underlying improvement in the nation’s stagnant job market.

“Employment is basically flat, which is a better picture than we thought we were seeing a month ago,” said David Wyss, chief economist of Standard & Poor’s.

The unemployment rate fell to 5.7 percent from 6 percent as the nation added 143,000 jobs. The improvement follows sharp drops in employment in November and December, and the gains were concentrated in retail jobs.

To economists, the numbers suggest not that retailers went on a hiring binge in January, but rather that they never hired temporary holiday workers in the first place and thus didn’t trim their January payrolls to the degree they normally do.

“People not hired for the Christmas holiday season weren’t fired afterwards,” said Bill Cheney, chief economist of John Hancock Financial Services. “That’s the biggest component of the gains.”

Indeed, December and January were essentially a wash economically, with the nation shedding only 13,000 jobs in the two month span.

Beyond the yo-yo behavior of retail employment in the federal statistics, Friday’s report suggests that the industries that have been shedding jobs throughout a recession that began in 2001 continued doing so in January.

Manufacturers shed 16,000 jobs in January, for a total of 506,000 manufacturing jobs cut since January 2002. Meanwhile, the nation added 18,000 health care jobs and 11,000 private educational jobs.