I’m not very worried about the 20,000 increase in the headline number, especially after January was revised even higher to 311,000.  That said, the worst part of the report was 45,000 leaving the labor force.

Highlights:

• Wages +3.4%
• Unemployed for Economic Reasons -837,000 to 4,310,000 (lowest February 2007)
• U6 Unemployment Rate 7.3% (best since March 2001)

The U6 unemployment number is by far a better gauge than the U3 used in the press.  The “true” unemployment report shows an economy on the move, which is lowering part time work as the only choice.

Housing was also part of the economic news today.  January housing numbers were up significantly in what has been a rather lethargic new construction sector.  Housing starts were up 18.6% in January from December and permits increased 1.45%. However, permits in single family were down 2.1%. Year to date, starts are still down 7.8% and permits are lower by 1.5%.

• January starts rate of 1.230 million units
• January permits rate of 1.345 million units
• Single family starts +4.5% to 926,000
• Single family permits down in all regions except the Midwest, which was up 1.8%

The market has made a couple rally attempts, which have failed, although we are off the lows.  The Dow transports are down for 11 days in a row, which hasn’t happened in close to 40 years.  Energy is the laggard today, and the only sector hanging in positive territory, barely, are Utilities.