Council of Economic Advisers Blog

  • The Employment Situation in February

    Today’s employment report shows that private sector payrolls increased by 222,000 in February, marking 12 consecutive months of growth that has added 1.5 million jobs at private firms. The unemployment rate fell for the third straight month to 8.9 percent. The 0.9 percentage point drop in the unemployment rate over the past three months is the largest such decline since 1983, and it has been driven primarily by increased employment, rather than falling labor force participation.

    Though unemployment remains elevated, we are seeing signs that the initiatives put in place by this Administration – such as the payroll tax cut and business tax incentives for investment – are creating the conditions for sustained growth and job creation. The steep decline in the unemployment rate and the overall trend of economic data in recent months has been encouraging, but there is still considerable work to do to replace the jobs lost in the downturn. We will continue to work with Congress to find ways to reduce spending, but not at the expense of derailing progress in the job market, making the investments we need to educate our workers, investing in science, and building the infrastructure our companies need to succeed. 

    In addition to the increases last month, the estimates of private sector job growth for December (now +167,000) and January (now +68,000) were revised up. Overall payroll employment rose by 192,000 last month. The sectors with the largest payroll employment growth were professional and business services (+47,000), education and health services (+40,000), manufacturing (+33,000), and construction (+33,000). State and local government experienced a large decline (-30,000), and has shed jobs in 14 of the past 16 months.

    The overall trajectory of the economy has improved dramatically over the past two years, but there will surely be bumps in the road ahead.  The monthly employment and unemployment numbers are volatile and employment estimates are subject to substantial revision.  Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report. 

    Private Payroll Employment Chart for February, 2011

    Austan Goolsbee is Chairman of the Council of Economic Advisers

  • The Employment Situation in January

    Today’s employment report shows that the unemployment rate fell sharply to 9.0 percent and private sector payrolls increased by 50,000 in January. Revisions to private sector payroll data show that 1.1 million jobs were added during 2010, the strongest private sector job growth since 2006. The 0.8 percentage point decline in the unemployment rate over the past two months is a welcome development; however, the rate remains unacceptably high.

    The overall trend of economic data in recent months has been encouraging, as initiatives put in place by this Administration are taking hold, but there is still considerable work to do. Today, the Administration puts forward our comprehensive innovation agenda, which details our efforts to accelerate American leadership in educating our workers, investing in science, and building the infrastructure our companies need to succeed.  Innovation will be a key driver of the economy as we strengthen America’s position as home to the world’s best new businesses and industries, and the best jobs.

    In addition to the increases last month, the estimates of private sector job growth for November (now +128,000) and December (now +139,000) were revised up. These revisions, along with the annual payroll survey revisions, show that private sector employment has now grown for eleven consecutive months.

    Overall payroll employment rose by 36,000 last month. Among the sectors with the largest payroll employment growth were manufacturing (+49,000), retail and wholesale trade (+36,700), and professional and business services (+31,000). Transportation and warehousing (-38,000), construction (-32,000), finance (-10,000), and local government (-10,000) were among the sectors that subtracted from the total. Severe weather in some parts of the country may have impacted employment and hours in some industries.

    The 0.4 percentage point decline in the unemployment rate to 9.0 percent in January was accounted for by a large increase in employment as measured by the household survey (which is separate from the payroll survey). The labor force participation rate was unchanged.

    The overall trajectory of the economy has improved dramatically over the past two years, but there will surely be bumps in the road ahead.  The monthly employment and unemployment numbers are volatile and employment estimates are subject to substantial revision.  Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.

    Private Payroll Employment Chart for January of 2011

    Austan Goolsbee is Chairman of the Council of Economic Advisers

  • Advance Estimate of GDP for the Fourth Quarter of 2010

    Today’s report shows that the growth rate of the economy continued to increase in the final quarter of 2010, a further sign that the economy continues to gain momentum as it recovers from the worst recession since the Great Depression. Real GDP, the total amount of goods and services produced in the country, grew at a 3.2 percent annual rate in the fourth quarter of last year, the sixth straight quarter of positive growth.  For 2010 as a whole, GDP rose 2.9 percent, the fastest since 2005 and a dramatic reversal compared with the -2.6 percent rate in 2009. Private forecasters have predicted that the tax cut package signed by the President in December will have a significant impact on economic growth this year. We are on the right path, but have a lot more work to do to accelerate growth so that we are creating the jobs we need.

    Some key components of GDP continued to expand in the fourth quarter, including exports (8.5 percent), consumer spending (4.4 percent), equipment and software investment (5.8 percent), and residential spending (3.4 percent). Government spending fell 0.6 percent. Consumption and net exports made the largest positive contributions to growth this quarter, while the decline in inventory investment subtracted substantially from GDP growth.

    The overall trend of economic data over the past several months has been encouraging. The measures we worked with Congress to pass last month that continue tax cuts for the middle class and extend unemployment insurance are important for strengthening the recovery in 2011 and putting more money in the pockets of American families. The incentives for business investment will further boost the economy. The Administration will continue to focus on actions that the President has recommended to increase growth and job creation, such as providing incentives to encourage businesses to invest and hire here at home, investing in education and infrastructure, and promoting exports abroad.

  • The Employment Situation in December

    Today’s employment report shows that private sector payrolls increased by 113,000 in December, capping 12 consecutive months of growth that added 1.3 million private sector jobs to the economy during 2010, the strongest private sector job growth since 2006. The unemployment rate fell 0.4 percentage point to 9.4 percent last month.

    Private Employment Chart for December of 2010

    The overall trend of economic data over the past several months has been encouraging, due in large part to the initiatives passed by this Administration, but we still have a ways to go. The measures we worked with Congress to pass last month that continue tax cuts for the middle class and extensions to unemployment insurance are vital to sustaining the recovery. The Administration will also continue to focus on actions that the President has recommended to increase growth and job creation, such as providing incentives to encourage businesses to invest and hire here at home, investing in education and infrastructure, and promoting exports abroad.

  • The Employment Situation in November

    Today’s employment report shows that private sector payrolls increased by 50,000 in November, lower than expectations, but continuing eleven consecutive months of private sector job growth. The pace was not enough to prevent the unemployment rate from climbing to 9.8 percent. 

    While the overall trend of economic data over the past two months has been encouraging, today’s numbers underscore the importance of extending expiring tax cuts for the middle class and unemployment insurance for those Americans who have lost their jobs.  Failure to do this would jeopardize hundreds of thousands of additional jobs, and leave millions of Americans, who are out of work through no fault of their own, on their own.

    In addition to the increase in November, the estimates of private sector job growth for September (now 112,000) and October (now 160,000) were revised up. Since last December, the economy has added 1.2 million private sector jobs. So far this quarter, including today’s revisions, private sector employers have added an average of 105,000 jobs per month.

  • Austan Goolsbee Responds to Job Seekers' Questions

    Last month, we reached out, along with Monster.com, to take questions directly from job seekers about the Administration's economic recovery efforts.  Austan Goolsbee, Chair of the Council of Economic Advisers, answered questions that either had the most 'likes' in Monster's Facebook community or sparked the most conversation.  Here's some of what Austan addressed:

    Evelyn Kraemer asked about creating jobs by rebuilding America's infrastructure.
    Watch the video response

    Christopher Williams asked about our ability to "innovate and create" as an engine of economic growth.
    Watch the video response

    Andrea Pleshette Lowe asked about what the Obama Administration is doing for small business.
    Watch the video response

    Watch all of Austan's responses on Monster's YouTube page.