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By Jason Stipp and Robert Johnson, CFA | 02-01-2013 08:30 AM

No Great Expectations (or Worries) for the Job Market

Recent revisions helped 2012's employment growth look better than initial forecasts, but we don't expect a sizable surge (or decline) for 2013.

Jason Stipp: I'm Jason Stipp for Morningstar. We got the government employment report for January on Friday. It showed that 157,000 jobs were added to the economy; the unemployment rate ticked up 7.9%. The report was a bit lighter than some economists had expected. Here to give their take on the numbers are Morningstar's Bob Johnson, our director of economic analysis, and Vishnu Lekraj, who is an equity analyst covering the employment sector.

Thanks for joining me again, guys.

Vishnu Lekraj: Thank you.

Bob Johnson: Great to be here.

Stipp: Let's talk about the report, 157,000 was a little light. But before we dig into that report, there was some bigger news I think in the report about some revisions that we saw in November and December, some upward revisions. So, although, the 157,000 looks light compared to expectations for January, the December figures were revised up to 196,000 from 155,000 and November to 247,000 from 161,000. Bob, what do you make of those revisions and then what do you make of this somewhat lighter report in January?

Johnson: Well, I think they did have some big revisions, and we've been expecting revisions. Obviously we got some of them in construction with those numbers being sharply revised upward, and retail being sharply revised upward. Those were really the two big categories.

There was a little bit of an offset, by the way. The government numbers were revised the other way in these reports, which is consistent with a lot of things we've been hearing out of government lately, that there the real drag on the economy right now--government.

So, revisions are pretty typical to happen, and we had said that we thought the construction was a little bit undercounted, and obviously retail is changing around what they're doing a lot and having new thoughts about how many people to have in a store and when. So, I think that's a lot of what's going on there, and I think you really have to look at all the months together rather than saying we had this big boom. I really don't think we grew 250,000 jobs in November; I really think that's kind of an outlier, and if you average two or three months together, you're probably closer to reality.

Stipp: Vishnu, if we see a trend where we're getting upward revisions for a couple of months, do you expect January also is going to be upwardly revised?

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