National Employment Situation Improving as January Unemployment Rate Drops to 9.7%

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Researched by Industrial Info Resources (Sugar Land, Texas)--In recent months, the employment situation in the United States has shown signs of slowly improving. However, the national unemployment rate has continued to climb. Despite claims from Washington that tens of thousands of jobs have been created by last year's stimulus bill, more and more people have been put out of work each month, causing the rate to continue its historic climb. But in January, spending on construction starts in the U.S. was strong, and combined with gains in the retail sector the jobs situation improved, lowering the unemployment rate from 10% to 9.7%.

Only 20,000 jobs were lost in January, but the construction sector, despite the strong spending, saw employment drop by another 75,000 during the month. Non-residential specialty trade contractors were hit especially hard, losing 48,000 jobs in January. The manufacturing sector saw 11,000 jobs created, its first gain since January 2007. The motor vehicles and parts sector, with 23,000 jobs created, and the plastics and rubber sector, with 6,000 jobs created, helped balance out significant losses in other sectors.

Transportation and warehousing employment continued to take a hit, with 19,000 jobs lost, while couriers and messengers lost 23,000 jobs. However, significant gains were reported: temporary help services saw 52,000 jobs created; food stores, 14,000; clothing stores, 13,000; and general merchandise retailers, with 10,000. The federal government added 33,000 jobs, including 9,000 temporary jobs for the 2010 census.

On the spending side of the equation, the year started strong with more than $13 billion in capital and maintenance projects beginning construction in January. The Power Industry and the Alternative Fuels Industry led the way with $4.5 billion and $3.6 billion in construction starts, respectively. The Oil & Gas Production Industry also was strong in January, with $2.2 billion in construction starts.

The major change for the beginning of 2010 is where this spending has occurred. Traditionally, the Great Lakes region is one of the largest spending regions in the country, with its heavy manufacturing and automotive reliance. However, for 2010 the spending has shifted to other areas, chiefly, at least in January, the Mid-Atlantic region of the country, which saw $4.7 billion in construction starts during the month.

Other regions also had solid showings for January. The Southwest region, which includes Texas, Louisiana, Arkansas and Oklahoma, saw $2.6 billion in construction starts, and the West Coast region of California, Oregon and Washington posted $2.2 billion in construction starts. The Rocky Mountains region contributed $1.1 billion to the total, while the typically strong Great Lakes region added $700 million.

Overall, this is a good start for 2010. Unemployment, for now, is decreasing, and spending is rising. Thanks to the American public strongly voicing concern over lost jobs in recent months, we can expect a hard push for jobs creation during the coming months from the current administration, and should see the unemployment situation continue to improve as the year progresses. While we will not see any dramatic increases rapidly, as long as spending continues to remain strong, the unemployment situation should continue to head in the right direction.

Industrial Info is currently tracking an additional $30 billion in capital and maintenance projects that is scheduled to begin construction by the end of the first quarter in 2010. If all of this activity does indeed reach the construction stage in the next two months, we can certainly expect the improvement to continue.

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy related markets. For more than 26 years, Industrial Info has provided plant and project opportunity databases, market forecasts, high resolution maps, and daily industry news.