January jobs report: like a sports car at maximum acceleration
January jobs report: like a sports car at maximum acceleration
– by New Deal democrat
My focus on this report was on whether manufacturing and construction jobs turned negative or not, and whether the deceleration apparent in job growth would continue.
Both of those were answered emphatically in the negative. Here’s my in depth synopsis.
- 517,000 jobs added. Private sector jobs increased 443,000. Government jobs increased by 74,000. The three month moving average of growth increased sharply to 356,000, over a 100,000 jump.
- The alternate, and more volatile measure in the household report had 2nd very positive month in a row, increasing by 894,000 jobs. The above household number factors into the unemployment and underemployment rates below.
- U3 unemployment rate declined -0.1% to 3.4%.
- U6 underemployment rate rose 0.1% to 6.6%.
Leading employment indicators of a slowdown or recession
These are leading sectors for the economy overall, and will help us gauge whether the strong rebound from the pandemic will continue. These tilted to the negative:
- the average manufacturing workweek, one of the 10 components of the Index of Leading Indicators, reversed December’s decline and increased +0.3 hours to 40.9, although it remains down -0.7 hours from its February peak last year of 41.6 hours.
- Manufacturing jobs increased 17,000.
- Construction jobs increased 25,000.
- Residential construction jobs, which are even more leading, increased by only 100.
- Temporary jobs, which for the last several months were declining, reversed course and rose by 25,900.
- the number of people unemployed for 5 weeks or less declined -287,000 to 1,946,000, the lowest for the entire last 50 years except for 3 months in 2019.
Wages of non-managerial workers
- Average Hourly Earnings for Production and Nonsupervisory Personnel increased $.06, or +0.2%, to $28.26, a YoY gain of 5.1%, the lowest gain since June 2021.
Aggregate hours and wages:
- the index of aggregate hours worked for non-managerial workers increased by a sharp1.0%, which is near a record for the past 60 years, and has only been exceeded by 3 months since 1995, all of which were earlier in the pandemic rebound.
- the index of aggregate payrolls for non-managerial workers also increased sharply by 1.3%, and rebounded to up 9.2% YoY. This metric had been decelerating nominally almost consistently for the prior 16 months.
Other significant data:
- Leisure and hospitality jobs, which were the most hard-hit during the pandemic, rose 128,000, and have improved to -3.1% below their pre-pandemic peak.
- Within the leisure and hospitality sector, food and drink establishments added 98,600 jobs, and are now only -1.3% below their pre-pandemic peak.
- Professional and business employment rose 82,000.
- Full time jobs increased 278,000 in the household report.
- Part time jobs increased 606,000 in the household report.
- The number of job holders who were part time for economic reasons rose 172,000.
- The Labor Force Participation Rate increased 0.1% to 62.4%, vs. 63.4% in February 2020.
- Those not in the labor force at all, but who want a job now, increased 138,000 to 5.314 million, compared with 4.996 million in February 2020.
- November was revised upward by 34,000, and December was also revised upward by 37,000, for a net increase of 71,000 jobs compared with previous reports.
Finally, both the Establishment and Household report data for 2022 was revised this month.
In the Household report, total population was adjusted upward by 954,000, and employment by 810,000. Other metrics had little or no change.
In the Establishment report, almost all months in 2022 were revised higher, with the exception of January, April and May. The net effect was an increase of 813,000 jobs in 2022, with relatively weaker growth in Q2, but stronger growth in the other 3 Quarters.
This report could be likened to a sports car accelerating at maximum thrust. Almost everything was extremely positive. The only negative was the increase in involuntary part-time employment, which translated into a slight increase in the underemployment rate.
Everything else was positive, including all the leading indicators which I had been looking to weaken. In fact, some metrics were so positive that they make me think that some Holiday seasonality worked its way into the numbers. In particular, the 74,000 increase in government jobs was one of the strongest ever outside of census hiring every 10 years. Leisure and hospitality hiring was also among the strongest in the past 50 years outside of 2021, and food and drink hiring was the strongest ever aside from the immediate post-pandemic reopening through 2021.
Needless to say, in almost all sectors the pandemic losses have been completely recovered. As I indicated above, the universal sharp increases make me think that there was some unresolved seasonality in play. In particular, the return to bigger hiring in manufacturing contradicts every other measure of manufacturing in the past few months.
So I’ll celebrate this month’s report, but with a lingering suspicion that it is going to prove an outlier.
“The December jobs report: more deceleration,” – Angry Bear, New Deal democrat
Markets wobble because jobs are up
redStunning jobs increase may not be as good as it seems
Not a free link.
Whatever happened today was no doubt due in part to profit-taking after yesterday.
This “Fred C. DobbsN” I tossed in spam. Different address and name.
Just one of many problems posting from an iPhone.
It was you then? I can get it out of spam. Tell me so you don’t have issues posting.
That FredN post was to be a Boston Globe link that is not free
re: The alternate, and more volatile measure in the household report had 2nd very positive month in a row, increasing by 894,000 jobs.
i beg to differ. BLS revised the December figure upwards, but published the old figure. they do that every year, and invariably everyone gets it wrong. i’ll just paste what i wrote, and if there’s questions, i’ll check back Sunday:
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.…
the January household survey‘s data reflects the benchmark revision to the 2022 population figures which showed that December’s civilian noninstitutional population had been understated by a rounded 954,000; that the civilian labor force figure was understated by 871,000, the December employment figure understated by 810,000, the December unemployment figure was understated by 60,000, and the resulting count of those not in the labor force was understated by 82,000…applying those changes to other household survey ratios, the employment-population ratio and labor force participation rate both increased by 0.1 percentage points over 2022 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 into 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 894,000 to 160,138,000, and that the estimated number of those unemployed fell by 28,000 to 5,694,000; which led to a 866,000 increase in the total labor force, and left those not in the labor force up by 252,000 at 100,130,000, all after an apparent population increase of 1,118,000…removing the effect of the revision on those changes, then, we find that the number employed in January was actually up by 84,000, that the number unemployed was down by 88,000, and hence the labor force fell by a rounded 5,000 and those not in the labor force rose by 170,000, as the population actually rose by 164,000…given those revised December figures, the labor force participation rate was unchanged at 62.4%, and the employment to population ratio, which we could think of as an employment rate, was unchanged at 60.2% in January, while the 88,000 decrease in the number counted as unemployed was just large enough to lower the unemployment rate, as it edged down from 3.5% to 3.4%, the lowest since 1970….
I am not sure what your point is. I do know every year has an adjustment and they collect 97% of the numbers needed. I also believe there is a delay in getting these numbers. Consequently, everything up to the point of adjustment is in error to a degree.
“Establishment survey benchmarking is done each year to align employment estimates from the survey with employment counts derived primarily from the administrative file of employees covered by Unemployment Insurance (UI). All employers covered by UI laws are required to report employment and wage information to the appropriate state UI agency four times per year. The UI data are obtained and edited by each state’s Labor Market Information agency. They are tabulated and published through the BLS Quarterly Census of Employment and Wages (QCEW) program. Both the QCEW and CES categorize their data using the North American Industry Classification System (NAICS). About 97 percent of total nonfarm employment within the scope of the establishment survey is covered by UI and is available to the CES program via QCEW records.”
Also: Table 1 presents revised total nonfarm employment data on a seasonally adjusted basis for January 2022 through December 2022. The revised data for April 2022 forward incorporate the effect of applying the rate of change measured by the sample to the new benchmark employment level, as well as updated net birth-death model forecasts and new seasonal adjustment factors. Revisions to November and December also reflect incorporation of additional sample receipts. For more information about the methodology of benchmarking in the CES program, see the Benchmark section in the CES Handbook of Methods.“
CES National Benchmark Article : U.S.Bureau of Labor Statistics (bls.gov)
The adjustment is not unusual. As compared to pre-pandemic, we are still down 9 tenths of 1% in Participation Rate. from February 2020 Although the total numbers in Civilian Labr Force and Employed exceed 2020 numbers of the same ilk.
run, i wasn’t even referring to the establishment survey’s rebenchmarking…when they do that, they go back and change data from the previous months and no one has a problem with it…however, when they make the population adjustment to the household survey, they apply that revision to January but leave the old data as it was previously published…everyone covering the report goes in, subtracts the unrevised December data from the revised January data, and gets it wrong.
here’s the link to the main household survey table: https://www.bls.gov/news.release/empsit.a.htm
it’s obviously wrong because it shows a one month population increase of 1,118,000…hence other figures derived from that household survey table (or FRED) are wrong too…
here’s the summary: https://www.bls.gov/news.release/empsit.nr0.htm
down where they headline “Adjustments to Population Estimates for the Household Survey” they say:
Tables B & C that follow show what they did better than my explanation. you and NDD should go read that section to understand this report, rather than be upset that it’s me telling you about it…
i’ll have nothing else to say on it…
I do not see NDd anywhere on here. You are taking to me only.
No one here is upset with you. Lose the poor me tears. I questioned your remarks and I gave you what I thought was correct.