Treasury Economist Sees Hopeful Signs For Recovery

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The Treasury Department saw hopeful signs in Friday's employment figures, which showed a loss of 20,000 jobs in the month of January but an unexpected drop in the unemployment rate.

The department's chief economist Alan Krueger said that while the overall job market is still weak, there are hopeful signs that it is stabilizing.

"Together, the economic statistics paint a picture of an economy that is healing in large part as a result of the Recovery Act and the financial stabilization plan," Krueger said. "Today we see further hopeful signs that the job market, along with the broader economy, is healing."

The job losses in January were significantly lower than in December, he said, continuing an overall trend of declining losses since the peak in January of last year.

"The unemployment rate surprised most analysts by falling 0.3 percent to 9.7 percent in January," he said. "That brings the unemployment rate under 10 percent for the first time since September 2009."

Despite those positive signs, Krueger said that the unemployment rate is still unacceptably high.

"There were some bright spots. Manufacturing gained 11,000 jobs," he said. "Service providing payrolls rose by 48,000."

He added, "On the down side, construction jobs were down 75,000 and job losses in construction over the past year have been particularly high in non-residential construction."

One leading indicator, hiring of temporary workers, is continuing to increase at about the same pace as it did last month, which he said may indicate that companies are using temporary positions to screen applicants for permanent positions.

Krueger said he couldn't be certain about the drop in unemployment but that there were signs that younger people were not entering the work force as rapidly, choosing instead to further their educations.

He added that the President plans to take additional steps to encourage companies to boost hiring and increase wages while also noting noted that there is additional government stimulus spending scheduled for this year.

"I think these programs are particularly well timed for the current economic climate," Krueger said. "We've always known that the job market would be a challenge."

He added, "It's extremely important that we support the economic recovery that's taking place."

The Treasury Department saw hopeful signs in Friday's employment figures, which showed a loss of 20,000 jobs in the month of January but an unexpected drop in the unemployment rate. The department's chief economist Alan Krueger said that while the overall job market is still weak, there are hopeful signs that it is stabilizing. (Market News Provided by RTTNews)