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Two questions spring to mind upon first glance at the U.S. employment numbers for January. The Labor Department reported that U.S. employers shed 20,000 jobs during the month - not a horrendous figure, but in the wrong direction: The consensus among economists was for a gain of 15,000 jobs. What also looks bad is the fact that the December job losses were revised to 150,000 from 85,000.

At the same time, there was some good news here: The unemployment rate took an unexpected turn for the better, falling to 9.7 per cent from 10 per cent.











Question 1: Why would the unemployment rate fall when more jobs were lost during the month?

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Question 2: What's more important, the good news on the unemployment rate or the bad news on job losses.

Here are a couple of early answers from economists, while we wait to see what the stock market makes of it all.

Ian Shepherdson, chief U.S. economist at High Frequency Economics: ""Household survey shows employment up 541,000 and unemployment down 430,000; hence the drop in un rate; expect a partial reversal next month. Overall, improving payroll trend continues but progress is slow."

Ian Pollick, economics strategist at TD Securities: "The details of the report were actually quite encouraging despite the headline decline. The goods-producing sector continued to lose jobs for the 26th consecutive month, though the bulk of the loss was attributable to a big 75,000 month-over-month decline in construction. The manufacturing sector advanced by 11,000 month-over-month, which is the first such instance of net job creation in the sector since January 2007! In addition, the service-producing sector gained some extremely good ground during the month, adding 48,000 month-over-month."

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