According to the official payrolls report, employment dropped by 36 000 in February, less than the expected 68 000 decline. The January figure was downwardly revised from -20 000 to -26 000, while the December outcome was upwardly adjusted from - 150 000 to -109 000. All revisions taken into account, the payrolls were 67 000 stronger than expected. Looking at the details of the February data, both private and government payrolls fell by 18 000. In goods-producing, employment fell by 60 000 (from -53 000) due to a sharp decline in construction (-64 000 from -77 000), which might be weather-related, while manufacturing rose marginally (1 000 from 20 000), which might also have been negative affected by the weather (ISM employment index was sharply higher). In service providing, employment rose for the second consecutive month (42 000 from 20 000), partially due to a continued increase in temporary help (48 000 from 50 000), the fifth consecutive rise. This bodes well for the overall payrolls in the coming months as they normally lead the overall payrolls. The household survey showed that the unemployment rate stayed unchanged at 9.7%, while an increase to 9.8% was expected, following a 0.3%-point drop in January. The civilian labour force rose from 153.170 million to 153.512M and unemployment increased slightly from 14.837M to 14.871M, the first increase in four months. Both average (33.8 from 33.9) and aggregate (90.7 from 91.0) hours worked dropped, but less than expected and once more probably negatively affected by the weather. In February, the labour market data were distorted due to the snowstorms. Although it might be discouraging that employment is still falling, the overall trend remains positive and the unemployment rate seems to have peaked. So we expect to see positive payrolls figures as soon as in March. Also in the coming months, the government payrolls might get a boost from the 2010 Census.
EMU: German factory orders post strong gains
In January, German factory orders came out surprisingly strong rising by 4.3% M/M, while an increase by 1.3% M/M waGerman factory orderss expected. The December figure was upwardly revised from -2.3% M/M to -1.6% M/M. The details show that increase was broadly based with strong gains in intermediate (6.0% M/M) and capital (3.7% M/M) goods, while consumer goods rose by a more moderate 0.4% M/M. After the German economic growth came to a standstill in the fourth quarter of 2009, the strong factory orders raise hopes that growth will pick up at the start of 2010.
