BLS Annual Adjustment, +467,000 Jobs in January, U3 Rises One tenth% to 4%

This is one of the times when I missed the BLS annual adjustment also. RJS was right on the money this morning in reporting it. A portion of the 467,000 was due to adjustments in December and January data.

RJS, MarketWatch 666, Employers Add 467,000 Jobs in January, Unemployment Rate Rises to 4.0%

The Employment Situation Summary for January from the Bureau of Labor Statistics indicated a decent level of job creation during the month, while the month over month household survey results were skewed by the effects of an annual revision, which posted figures after the revision for January but not for December, the month that was revised, leading to widespread reporting of incorrect month over month changes.

Estimates extrapolated from the seasonally adjusted establishment survey data projected employers added 467,000 jobs in January, after the previously estimated payroll job decrease for December was revised from 199,000 to 510,000. The payroll jobs increase for November was revised from 249,000 to 647,000, changes that largely reflect the effects of updated seasonal adjustment models, which were also part of an annual benchmark revision . . . the unadjusted data, meanwhile, shows that there were actually 2,824,000 fewer payroll jobs remaining in January than in December, as the normal post holiday seasonal layoffs in areas such as retail, wholesale, goods transportation, leisure and hospitality were normalized by the seasonal adjustments..

As is usual for a January jobs report, this report included the results of the annual benchmark revision, which revised prior reports and set March 2021 (the benchmark month) at 144,431,000 payroll jobs, 374,000 more jobs than was previously reported for that month, while job totals for every month in 2021 were concurrently revised by quantities ranging from 398,000 more jobs in November to 405,000 fewer jobs in June (as is shown in Table A of the press release)…incorporating this revision, there were 6,612,000 more jobs in January than in January of a year ago….however, January’s non-farm payrolls were still 2,875,000 jobs below the 152,523,000 seasonally adjusted jobs that are now indicated for February 2020, the month before before the pandemic hit….since all the newly revised establishment survey figures are now incorporated into this month’s establishment report as if previously reported totals had never been reported, that’s the way we’ll cover it…

Seasonally adjusted job increases in January were concentrated in the private service sector, as the goods producing sector only added a net of 4,000 jobs, after 13,000 job gain in manufacturing was offset by job losses in construction and resource extraction, while government payrolls netted a 23,000 job increase, as a 29,400 job increase in local school districts was slightly offset by government job losses elsewhere….the largest job increase was the addition of 151,000 jobs in the leisure and hospitality sector, which included 108,200 jobs in bars and restaurants, 22,600 jobs in accommodation, and 20,000 more jobs in amusements, gambling, and recreation….the broad professional and business services sector added 86,000 jobs, with 26,200 of those working for temporary help services, 15,700 employed by management and technical consulting services, and 14,800 more by computer systems design and related services… seasonally adjusted retail trade employment increased by 61,400, as general merchandise stores kept 29,000 more workers on their payrolls than were expected in January, while drug stores added 11,300 employees… employment in the transportation and warehousing sector increased by 54,200 in January,with 21,200 of those working as couriers and messengers and 13,400 working in warehousing and storage…meanwhile, health care employment increased by 18,000 jobs in January, with the additon of 9,700 jobs in doctor’s offices, and employment in the information sector was also 18,000 higher, with the additon of 8,100 jobs in the motion picture and sound recording industries and 7,500 more in data processing, hosting and related services…16,400 more jobs were added in the wholesale trade sector, with 10,700 of those in the trade of durable goods, while “other services” added 15,000 more workers, with 6,300 of those working in personal and laundry services….meanwhile, employment in other major sectors, including financial activities, utilities, social assistance, and the private educational services sector all saw minimal jobs changes in January…

The establishment survey also showed that average hourly pay for all employees rose by 23 cents an hour to $31.63 an hour in January, after it had increased by a revised 17 cents an hour in December; at the same time, the average hourly earnings of production and nonsupervisory employees increased by 17 cents to $26.92 an hour…employers also reported that the average workweek for all private payroll employees decreased by 0.2 hour to 34.5 hours in January, while hours for production and non-supervisory personnel decreased by 0.2 hour to 34.4 hours…at the same time, the manufacturing workweek fell 0.1 hour to 40.2 hours, even as average factory overtime edged up by 0.1 hour to 3.3 hours….

Meanwhile, the January household survey‘s data reflects the benchmark revision to the 2021 population figures which showed that December’s civilian noninstitutional population had been understated by a rounded 973,000; that the civilian labor force figure was understated by 1,530,000, the December employment figure understated by 1,471,000, the December unemployment figure was understated by 59,000 too low, and the resulting count of those not in the labor force was thus overstated by 557,000…applying those changes to other household survey ratios, the employment-population ratio and labor force participation rate both increased by 0.3 percentage points over 2021 due to the population revision, while the unemployment rate was unchanged….however, even after making those determinations, they left the December data in the household survey summary as it was previously published, while incorporating the revisions to December in the January published data…

With that, the January household survey data appears to indicate that the seasonally adjusted extrapolation of those who reported being employed rose by an estimated 1,199,000 to 157,174,000, and that the estimated number of those unemployed rose by 194,000 to 6,513,000; which led to a 1,393,000 increase in the total labor force, and left those not in the labor force down by 326,000 at 99,516,000, all after an apparent population increase of 1,066,000…removing the effect of the revision on those changes, then, we find that the number employed in January was actually down by 272,000, that the number unemployed was up by 135,000, and hence the labor force fell by a rounded 137,000 and those not in the labor force rose by 231,000, as the population actually rose by 94,000 . . . given those revised December figures, the labor force participation rate was unchanged at 62.2%, while the employment to population ratio, which we could think of as an employment rate, fell from 59.8% in December to 59.7% in January, while the 135,000 increase in the number counted as unemployed was just large enough to raise the unemployment rate, as it edged up from 3.9% to 4.0% . . . at the same time, the number of those who reported they were forced to accept just part time work fell by 212,000, from 3,929,000 in December to 3,717,000 in January, which was enough to lower the alternative measure of unemployment, U-6, which includes those “employed part time for economic reasons”, from 7.3% of the labor force in December to 7.1% in January, the lowest since February 2020

Like most reports from the Bureau of Labor Statistics, the employment situation press release itself is easy to read and understand, so you can get more details on these two reports from there…note that almost every paragraph in that release points to one or more of the tables that are linked to on the bottom of the release, and those tables are also on a separate html page here that you can open it along side of the press release to avoid the need to scroll up and down the page to view the tables you want to see..