It was the second weak jobs report in a row and could presage a slowdown in what seemed to be an acceleration of jobs growth in the second half of 2013. For all of last year, the economy added an average of 194,000 jobs a month. Seasonally adjusted growth in the past three months has been just 154,000.
Many analysts are blaming January's frigid weather. Some are also pointing to the Current Survey Report's increase of 616,000 new jobs. The CPS is more volatile and therefore less trustworthy than the business establishment report which the BLS uses for the job count each month. But, sometimes at least, it is a good predictor of future increases in the latter.
Automatic Data Processing on Wednesday had reported a seasonally adjusted gain of 175,000 private-sector jobs for January.
The civilian labor force rose by 499,000. That rise came after drop of 347,000 in December. The employment-population ratio rose to 58.8 percent. The labor force participation rate rose to 63 percent.
As predicted by many analysts a month ago, the BLS revised its previous report on new job creation for December from the 74,000 that had sparked so much stunned head-scratching to just 75,000. The November figures were revised from 241,000 to 274,000.
As the Economic Policy Institute has pointed out, to get back to pre-Great Recession levels by 2017, we need job growth of 285,000 a month. If that level could be maintained, it would mean the job recovery would have taken 10 years since the Great Recession began. In the post-World War II era, the United States has never gone 10 years between recessions.
The bureau provides several alternative calculations each month. One of those—U6—includes not just Americans without a job but also an estimate of how many workers have given up looking for up to 12 months but still want work, as well as those Americans working part-time even though they want full-time jobs—the underemployed. U6 fell to 12.7 percent in January. U6 does not include workers who have given up looking for a job for more 12 months. Those workers are simply left out of the count even if they still want jobs.
The number of officially unemployed Americans is now 10.2 million. But millions of discouraged workers are left out of that count. The number of long-term unemployed—out of work for 27 weeks or more—fell to 3.6 million. They are now 35.8 percent of the total unemployed. But that drop—of 232,000—could be at least partly due to the fact that unemployment compensation for the long-term unemployed expired in December. To get compensation, recipients must be actively seeking work. Without those government checks, many have decided to stop looking, meaning they are no longer counted as part of the labor force.
Among other news in the January job report:
• Professional services: + 36,000
• Transportation and warehousing : + 9,900
• Leisure & hospitality: + 24,000
• Health care: + 1,500
• Retail trade: - 12,900
• Construction: + 48,000
• Manufacturing: + 21,000
• Average weekly manufacturing hours fell to 40.7 hours.
• Average hourly earnings for all employees on private nonfarm payrolls rose 5 cents to $24.21.
• Average hourly earnings of private sector production and nonsupervisory employees rose 6 cents to $20.39
Here's what the seasonally adjusted job growth numbers have looked like in December for the previous 10 years. [UPDATED: Revisions announced this morning have replaced numbers I included earlier.]
January 2004: + 161,000
January 2005: + 134,000
January 2006: + 277,000
January 2007: + 238,000
January 2008: + 15,000
January 2009: - 798,000
January 2010: - 18,000
January 2011: + 70,000
January 2012: + 360,000
January 2013: + 197,000
January 2014: + 113,000
The BLS jobs report is the product of a pair of surveys, one of more than 410,000 business establishments called Current Employment Statistics, and one called the Current Population Survey, which questions 60,000 householders each month. The establishment survey determines how many new jobs were added. It is always calculated on a seasonally adjusted basis determined by a frequently tweaked formula. The BLS report only provides a snapshot of what's happening at a single point in time.
It's important to understand that the jobs-created-last-month-numbers that it reports are not "real." Not because of a conspiracy, but because statisticians apply formulas to the raw data, estimate the number of jobs created by the "birth" and "death" of businesses, and use other filters to fine-tune the numbers. And, always good to remember, in the fine print, they tell us that the actual number of newly created jobs reported is actually plus or minus 100,000.