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Unemployment Numbers Just Not Good Enough

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK ( TheStreet) -- The economy added 243,000 jobs in January, and unemployment fell to 8.3%. Going forward unemployment is not likely to fall much further and could rise again.

Fourth-quarter growth was stronger as the global economy recovered from first half disruptions such as the earthquake in Japan, but going forward economists expect growth to slow to about 2%.

Job growth in the range of 130,000 should be expected to barely accommodate labor force growth but not much lower the unemployment rate. That is hardly a pace that will restore economic health, or validate President Obama's heavy intervention in the economy and industrial policies in the upcoming presidential campaign.

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The unemployment rate would be higher but for the fact that many adults have quit looking for work altogether, and the adult labor force participation rate remains depressed. In January, working age adults not participating in the labor force -- those neither employed nor looking for work -- increased by 88,000.

Also, it appears many unemployed professionals have established home-based businesses that really don't provide full time employment but do take workers off the unemployment rolls. Many likely have one or two days of paid work each week, and spend the balance of their time looking for business or idle.

Obama's Failure

Strong gains were notched in retail and wholesale trade, warehousing and transportation, leisure and hospitality, and health care and social services. Information technology and financial services registered substantial losses.

Manufacturing added 50,000 jobs and construction added 21,000.

Gains in manufacturing production are not accompanied by even stronger improvements in employment largely because so much of the growth is focused in high-value activity. Assembly work, outside the auto patch, remains handicapped by the exchange rate situation with the Chinese yuan.

The situation with the yuan is the single largest impediment to more robust growth in manufacturing and its broader multiplier effects for the rest of the economy; the Obama administration indicated over the holidays it has no intention of challenging China on this issue, and it enjoys the unlikely support of Speaker John Boehner.

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