Another solid jobs report ticked down the topline unemployment rate two notches to 8.3%. The economy added 243,000 jobs in January, with slight revisions upwards for November and December, and an annual benchmarking process also generally revised employment upward slightly.
The topline unemployment rate has now gone from 9.1% in August to 8.3% in January, a solid decline. The employment-population ratio [EPOP], however, did not change in January although the benchmarking process revised it upwards a bit. EPOP sits at 58.5%, still an historically low figure as more Americans stay out of the labor market. But good numbers like this, and more important, an improved labor picture in their communities, should entice at least some of them back to the workforce. And if the EPOP does increase, jobs would have to be created at a higher rate to keep up.
Long-term joblessness remains a huge problem. 42.9% of the unemployed in the Bureau of Labor Statistics survey have been out of work for 27 weeks or more. There are another 8.2 million Americans employed part-time for economic reasons. And another 2.8 million are “marginally attached to the labor force,” not counted as unemployed because they hadn’t searched for work in the past four weeks. That group is most likely to return to the labor force, and if they’re counted as unemployed, that changes the numbers.
The private sector added 257,000 jobs in the month, with the public sector again reducing by 14,000. If we had a public sector that wasn’t consistently shrinking as it has over the past several years, the country would be in a much better economic position.
Professional and business services was the leading sector in January, at +70,000 jobs. This includes accounting, engineering, and interestingly, employment services. Restaurant services went up by 33,000 and has added almost half a million jobs in a year. Health care, retail trade and manufacturing also went up nicely, and construction increased by 21,000 jobs.
Average hourly earnings increased by 4 cents, and the average workweek increased by 0.1 hours.
This is a solid report where the rate decrease had to do with jobs gains rather than shifting of people out of the labor force. There are plenty of headwinds for the economy, but if they are avoided, the status quo is doing modestly well.