On Feb. 3, the U.S. Bureau of Labor Statistics (BLS) released its monthly employment report, which was greeted as good news.
The numbers showed a net increase of 243,000 jobs, 108,000 above the consensus forecast. As a consequence, the unemployment rate dropped from 8.5 percent to 8.3 percent. The BLS also revised its November and December figures upward to reflect an additional 60,000 jobs not previously recorded.

The good news also included a slight increase in the average hours worked weekly and a modest wage increase. Private-sector growth posted 257,000 jobs broadly distributed, which included 50,000 new manufacturing jobs, 21,000 construction jobs, and 176,000 service-sector positions in areas like accounting, bookkeeping, architecture, engineering, hospitality, and health care.

Jay Carney, the White House press secretary, wasted no time claiming that the employment growth was evidence that President Barack Obama’s economic policies were working. The Christian Science Monitor said the White House was doing “cartwheels” over the positive numbers.

Buried in the report, however, were some trends that received little attention. First was the labor-force participation rate, which hit a 28-year low of 63.7 percent. This percentage, which reflects the number of American adults who are active in the labor force (employed or looking for work), has slid 2.3 percentage points just since 2008. This number held steady despite a rise in the employment-population ratio. Second, 1.2 million people disappeared from the labor force just in January, a number four times higher than in December 2011. 

Third, the BLS revised the baseline numbers in January 2012, based on final 2010 census figures which showed a 1.5 million person increase in the nation’s population than was previously assumed. Why didn’t the participation rate increase? Fourth, buried in the report was the long-term unemployment number (27 weeks or more), which remained constant and accounted for 42.9 percent of the unemployed or 5.5 million Americans. Fifth, the number of part-time employees who sought full-time employment held steady at 8.2 million. Sixth, the number of persons marginally attached to the labor force (looking for work but not within the previous four weeks) was unchanged at 2.8 million.

Reviewing the data made me think of my grammar-school teacher who taught us about numerators and denominators. She stressed how easy it was to raise or lower the results depending on the changes to each. The BLS formula for unemployment is simple: divide the unemployed job-seekers by the total labor force (“civilian, non-institutional population 16 years and older”). In January 2012, the numerator — unemployed job-seekers — decreased precipitously while the denominator held steady. Voila, the percentage of unemployed dropped.

But did the January unemployment numbers reflect good news or did they simply reflect discouraged job-seekers who gave up in the last four weeks? The non-partisan Congressional Budget Office calculates that if the labor-participation rate had remained constant in January, the real unemployment rate would be 9.55 percent. TrimTabs.com CEO Charles Biderman says his firm’s analysis of actual IRS tax receipts shows job growth in January of only 44,000 net jobs.

The BLS numbers are encouraging, but I would restrain my jubilation that the economy is ramping up quickly or that it has a solid foundation. Employers in general are still cautious about investing in new hires when faced with a host of political and economic uncertainties. Save the cartwheels until the employment picture is supported by the facts.    

Norman Poltenson is publisher of The Central New York Business Journal. Contact him at npoltenson@cnybj.com

Do you want to think positive today? Do you want to feel good about this country’s economic prospects? All right. Let’s go for it. Are you ready? Let’s think oil and gas.

Little Wow? Hey — I suggest you think Big Wow. And here is why.

Whether you like it or not, energy rules. When I was a kid, coal was king. Coal being a form of energy. This country was endowed with zillions of tons of coal. That coal allowed us to create gas (from coal). That coal fueled the steel mills of Carnegie. And, those steel mills turned this country into an industrial power like the world had never known.

Those steel mills and rubber plants turned this nation into an auto giant. They helped us to build a ship a day (or more) during WWII. The coal fueled the power plants that gave us the electricity to create an industrial behemoth. 

Next, we discovered this land was also endowed with oil. Then natural gas. They too helped us continue to grow industrially.

Alas, we entered a period in which we lost a lot of our confidence. We had to import more and more of our oil. And, we grew afraid to build more nuclear-power sources. We had built a society that required oil. Our own oil had run low. Low enough that we had to kiss the backsides of other countries so that we could fulfill our needs. And, some of those countries abused us. You invite abuse when you absolutely need something from another country.

The Arabs gave us the back of their hand, in many ways. They insulted us. Are you are old enough to remember the 1970s, when they forced us into long lines for a tank of gas for our cars? Then you know what I mean. 

Well, what goes around comes around. We have lately learned how to extract incredible amounts of oil and gas from our own land. The amount of gas is so large that its price has fallen by 75 percent. It is not often that a basic commodity falls that much in price.

Oil is not far behind. Think how much additional oil the world must produce to feed the growth of China and India alone. This growth in demand should push the price of oil into the heavens. But it has not. And it has not, because so much more oil is flowing. Thanks to these technologies.

You have read about the concept of “peak oil.” And you have read that skeptics scoff at “peak oil.” Well, it is looking as if the skeptics are right. For at least the next 40 or 50 years — and who knows what technology will come along by then. And don’t forget coal. We may yet develop technology that will make coal more enviro-friendly.

Energy rules today. As it has for a century. And cheap energy is here. In this country. And in countries that are a helluva lot more friendly to us than the Arabs and Chavez-Venezuelans.

Energy is the biggest and most powerful piece on the chessboard. It influences everything. This country’s energy players are discovering more and more oil and natural gas. And, they are bringing it to market at lower prices. They will allow this country to control more of its destiny. They will allow us to kick backsides more than we kiss them. They will brighten the future of America for many years to come.

From Tom…as in Morgan.   

Tom Morgan writes about financial and other subjects from his home near Oneonta, in addition to his radio shows and new TV show. For more information about him, visit his website at www.tomasinmorgan.com