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The American economy only added 113,000 jobs in
January, a disappointing result after a poor showing in December. The natural
monthly growth of the workforce is at about 90,000. In recent months, data shows
a falling trend.
The labour-force participation rate rose 0.2 percentage point to 63.0% - -
near the lowest level since 1978.
The Bureau of Labour Statistics (BLS) reported
that nonfarm payroll employment increased by 113,000 in January,
and the unemployment rate, at 6.6%, changed little.
Private-sector employment grew by 142,000. Employment rose in
construction, manufacturing, wholesale trade, and mining.
Incorporating the revisions for November and December,
which increased nonfarm employment by 34,000 on net, monthly job
gains have averaged 154,000 over the past 3 months. In 2013,
employment growth averaged 194,000 per month.
Revisions by the BLS suggest that there were
roughly 369,000 more jobs in the economy in March 2013 than previously
estimated. That brought the estimate of total US employment that month to
135.7m jobs. The new data suggest the economy added 194,000 jobs a month in
The US added a meagre 113,000 jobs last month, raising concerns about the
durability of the economy, but the unemployment rate dropped to 6.6% and a
broader measure of unemployment dropped even further to 12.7% and it appeared to
be for encouraging reasons.
The Wall Street Journal says that the main reason for the disparity is that
two figures are derived from different surveys. The number of jobs added
comes from businesses in what is known as the establishment survey, while the
unemployment rate is taken by a poll of households. The two data sets generally
move in the same direction but can vary widely from month to month. January was
one of those months.
The number of people who said that they had a job last month soared in January.
The Labour Department made its annual change in the numbers it uses for the
overall population this month. That makes January-to-December comparisons
difficult, but those adjustments were pretty small overall this year. But even
taking the adjustment into account, there were more than 600,000 more people
this month counted as employed than last month.
At the same time the number of people in the overall labour force surged by
nearly 500,000. That brought the share of the population working or looking for
work — called labour force participation rate — up to 63%, still a low rate
historically but moving in the right direction.
John Ryding, chief economist, and Conrad
DeQuadros, senior economist, of RDQ Economics commented - - "We
suggest looking at 12-month average trends in the household survey
because of the monthly volatility in the report and we note that the
number of unemployed has dropped by 2.1m since January 2013, while
employment has risen by 1.8mn. This suggests the drop in the
unemployment rate from 7.9% to 6.6% is not just a result of falling
Construction added 48,000 jobs in January, more than
offsetting a loss in December. In January, employment rose in
both residential and nonresidential building (+13,000 and
+8,000, respectively) and in nonresidential specialty trade
contractors (+13,000). Heavy and civil engineering construction
added 10,000 jobs.
Manufacturing employment increased by 21,000 in January.
Job gains occurred in machinery (+7,000), wood products
(+5,000), and motor vehicles and parts (+5,000). In 2013,
employment growth in manufacturing averaged 7,000 per month.
In January, wholesale trade employment rose by 14,000,
mostly in nondurable goods. Over the prior 12 months, wholesale
trade added an average of 8,000 jobs per month.
Mining employment increased by 7,000 in January. In 2013,
employment growth in mining averaged 2,000 per month.
Professional and technical services employment rose by
20,000 in January. Job growth averaged 17,000 per month in 2013.
Employment in leisure and hospitality continued to trend up
in January (+24,000). Over the prior 12 months, leisure and
hospitality added an average of 38,000 jobs per month.
In January, health care employment was essentially
unchanged for the second consecutive month. In 2013, health care
added an average of 17,000 jobs per month.
Retail trade employment changed little in January
(-13,000). A large job loss in sporting goods, hobby, book, and
music stores (-22,000) offset gains in the prior 3 months.
Employment rose by 7,000 in motor vehicle and parts dealers over
Federal government employment declined by 12,000 in
January. Over the past 12 months, federal government employment
has decreased by 85,000, or 3.0%.
Average hourly earnings of all employees on private nonfarm
payrolls rose by 5 cents in January to $24.21. Over the past 12
months, average hourly earnings have risen by 1.9%. From
December 2012 to December 2013, the Consumer Price Index for All
Urban Consumers (CPI-U) increased by 1.5%.
The establishment survey data released today reflect the
incorporation of annual benchmark revisions. Each year, The BLS
re-anchors its sample-based survey estimates to full universe
counts of employment, primarily derived from administrative
records of the unemployment insurance tax system. The level of
nonfarm payroll employment in March 2013 was revised up by
347,000 (not seasonally adjusted) or 0.3%. The average
benchmark revision over the past 10 years was plus or minus 0.3%. (Further information about the benchmark revision and
its impact is contained in the BLS news release and on the web site
In accordance with usual practice, household
survey data for January reflect updated population estimates from the
U.S. Census Bureau. This year, the impact of the new controls on the
unemployment rate and other major household survey measures is
Returning to the data for January, both the unemployment
rate, at 6.6%, and the number of unemployed persons, at
10.2 million, changed little. The unemployment rate has declined
by 0.6%age point since October. In January, the number of
persons jobless for 27 weeks and over declined by 232,000 to 3.6
million, or 35.8% of total unemployment.
The labour force participation rate edged up to 63.0%
in January. The employment-population ratio increased to 58.8%. Among the employed, the number of persons working part
time for economic reasons fell by 514,000 to 7.3 million. These
individuals would have preferred full-time employment, but had
their hours cut or were unable to find full-time work.
In summary, nonfarm payroll employment increased by 113,000
in January, and the unemployment rate was little changed at 6.6%.
There's a big
disappointment in the lack of revision to December, says CNBC's Steve
Liesman breaking down the numbers on jobs. CNBC's Rick Santelli; Austan
Goolsbee, Booth School of Business professor; Mark Zandi, Moody's
Analytics, and Kevin Hassett, American Enterprise Institute, weigh in.
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