The Labor Department’s Bureau of Labor Statistics reported Friday that the private sector of the economy generated 296,000 seasonally adjusted new jobs in January, while the public sector created 8,000 jobs, a net gain of 304,000. That was far above the median of 170,000 news jobs forecast by analysts surveyed by Bloomberg earlier this week. The headline unemployment rate rose to 4.0 percent. The bureau also gauges both unemployment and underemployment—a measurement that many economists say provides a better picture of the economy. It rose 0.5 point to 8.1 percent. Both those numbers were inflated at least somewhat by the government shutdown.
January marked the 100th consecutive month of job expansion.
In each month’s report, the BLS revises its count of new jobs for the previous two months as more complete labor market data become available. Friday’s report revised the December count sharply downward from 312,000 to 222,000, and November’s count upward from 176,000 to 196,000. With these revisions, the gains for November and December combined were 70,000 less than previously reported.
Average wages rose slightly in January. The BLS reported that from last January until now, wages have risen by 85 cents, a gain of 3.2 percent against an annual inflation rate that averaged 2.44 percent.
Anyone who worked any number of hours during the survey period is counted as employed, even if that was a single hour for the month. During recessions, many more people work part time, taking jobs wherever they can find them, or because the full-time hours of their existing jobs have been reduced because of economic downturn. At Advisor Perspectives, here’s Jim Mislinki’s look at full-time and part-time jobs since the year 2000, with the latest available data from December 2018:
While wages have been rising better than previously over the past few months, they are still far shy of where they should be. The Economic Policy Institute notes:
U.S. workers’ wages have climbed modestly but noticeably over the past year. EPI’s nominal wage tracker shows that in 2015 and 2016, this growth averaged 2.4 percent, in 2017 it averaged 2.5 percent, but in 2018 it accelerated to 2.85 percent—and it surpassed 3 percent growth in the last quarter of the year. This uptick has been long-coming and it took a longer spell of low unemployment to spur it than most would have thought.
3 percent growth for a quarter, however, should not constitute “mission accomplished” in the minds of macroeconomic policymakers like the Federal Reserve. In the long run, nominal wage growth should run at a rate equal to the Fed’s inflation target (2 percent) plus the long-trend growth in potential productivity (let’s call this 1.5 percent). This indicates that even the recent accelerations in wage growth leave us failing to meet these long-run goals.
Other statistics from Friday’s report:
The civilian workforce fell by 11,000 in January after rising by 419,000 in December and 127,000 in November. The labor force participation rate rose 0.1 point 63.2 percent in January. The employment-population ratio also rose 0.1 point to 60.7 percent.
Each month, the BLS calculates the number of new jobs based on the Current Employment Survey of 147,000 business establishments. It derives the unemployment rate from another study, the Current Population Survey of 60,000 households. This is why these two pieces of data don’t always seem to mesh perfectly. The final day of surveying falls around the 12th of each month, which means the data in this month’s jobs report actually measure jobs gained in the last part of December and the first part of January.
Here are additional details from the January jobs report:
Unemployment rates differ by race and sex. [Percentages in brackets are for December]. Adult men: 3.7 percent [3.6]; Adult women: 3.6 percent [3.5]; Whites: 3.5 percent [3.4] ; Blacks: 6.8 percent [6.6]; Asians: 3.1 percent [3.3]; Hispanics: 4.9 percent [4.4]; American Indians: Not counted monthly.
• Average hourly earnings of private-sector production and nonsupervisory employees rose in January by 3 cents an hour to $23.12.
• Average hourly earnings for all employees on private non-farm payrolls in January rose 3 cents an hour to $27.56.
• Average work week for all employees on non-farm payroll was 34.5 hours in January.
• The manufacturing work week in January was 40.8 hours.
January Job Gains and Losses for selected categories:
- Professional services: 30,000
- Temporary help services: 1,000
- Transportation & warehousing: 20,800
- Financial activities: 13,000
- Leisure & hospitality: 74,000
- Information: -4,000
- Education and health services: 55,000
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- Health care & social assistance: 45,400
- Retail trade: 26,600
- Construction: 52,000
- Manufacturing: 13,000
- Mining and Logging: 7,000
Here's what the seasonally adjusted job growth numbers have looked like in the previous decade compared with this January’s gain of 304,000 jobs.
January 2009: -783,000
January 2010: 3,000
January 2011: 20,000
January 2012: 355,000
January 2013: 195,000
January 2014: 177,000
January 2015: 213,000
January 2016: 90,000
January 2017: 252,000
January 2018: 171,000