January Unemployment Numbers Expected To Rebound

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DAVID GREENE, HOST:

On a Friday this is MORNING EDITION from NPR News. I'm David Greene.

RENEE MONTAGNE, HOST:

And I'm Renee Montagne. There's lots of anticipation about the government's monthly jobs report that will be released later this morning. Last month's job creation numbers were very disappointing - just 74,000 jobs added to the payroll - far below the recent monthly averages. NPR's John Ydstie joined us to talk about job creation and what it's telling us about the economy. Good morning.

JOHN YDSTIE, BYLINE: Hi, Renee.

MONTAGNE: So, do we expect the numbers will rebound this month from the last report?

YDSTIE: Yeah, there are some signs they will. A big private survey of employers found 175,000 new jobs were added to payrolls in January and surveys of economist show expectations that about 185,000 jobs were created. These are about the average number of jobs created over the past 12 months so they're reasonable expectations.

And remember, even though the governments survey showed far fewer jobs added in December it's only one month's data and the margin of error is 100,000 plus or minus so it many have been a statistical outlier.

MONTAGNE: But there does seem to be concern about the economy. The stock market has had a big sell-off in these first few weeks of the new year. Could the economy be slipping again?

YDSTIE: Yeah, there certainly is concern that some of the rosy expectations of the economy accelerating into 2014 may not be fulfilled. We've seen some disappointing signs that manufacturing is losing steam in the U.S. and in China, which of course is a big export market for the US. And there's also been concern about currency problems in some emerging markets like Turkey and Argentina and investors are pulling money out of those countries.

In the past couple of years China and emerging countries have been helping out the global economy; now there's concern they could become a drag. Another worry is that the Federal Reserve has started pulling back on its big stimulus program, which has supported both the U.S. economy and the global economy. So you're right - there's a nervousness about where we are right now.

MONTAGNE: How about the cold weather and the winter storms in a lot of parts of the country? That must be a disruption for the economy.

YDSTIE: Right. A lot of economists say that was part of the reason for the disappointing job creation in December. Of course, bad weather keeps people home from work, out of the stores and shopping malls, and nobody I know wants to go shopping for a car in a frozen lot where the cars are all covered by snow.

MONTAGNE: Right.

YDSTIE: Not surprisingly, we've seen that in disappointing car sales recently. But of course, the winter will end, we hope, and people who want a car will buy it so the drag will disappear. And, you know, when you look at the last half of last year, the economy really did seem to be gaining speed, even weathering the government shutdown pretty well. So it could be the current gloom will turn into better growth.

MONTAGNE: John, this is also the end of Janet Yellin's first week as the new leader at the Federal Reserve, she's replacing Ben Bernanke. Do you think she might rethink the Fed's winding down of its stimulus because the economy needs another boost?

YDSTIE: You know, I don't think so. Although if today's job report is as disappointing as last months, that could change the calculus. But, I think the Fed really wants to get out of its big bond-buying stimulus program partly because they view it as no longer effective and creating more risks than benefits.

MONTAGNE: Well, John, we'll be talking to you later in the show. Thanks very much.

YDSTIE: You're welcome, Renee.

MONTAGNE: NPR economics correspondent John Ydstie. Transcript provided by NPR, Copyright NPR.