January Jobs Report Shows 2014’s Strong Jobs Market Continuing Into New Year
The January Jobs Report showed that the trend of strong jobs growth we saw in 2014 appears to be continuing into the new year.
January’s employment report is often a difficult one to gauge in advance because it happens to be the month that the Bureau of Labor Statistics introduces its new round of statistical revisions for the coming year, which in itself can often cause numbers to fluctuate wildly. Additionally, it’s often unclear what the impact of the end of the seasonable hiring for Christmas will end up being in the retail field. That notwithstanding, most analysts were expecting a strong report for January and the numbers didn’t disappoint:
Total nonfarm payroll employment rose by 257,000 in January, and the unemployment rate was little changed at 5.7 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in retail trade, construction, health care, financial activities, and manufacturing.
The unemployment rate, at 5.7 percent, changed little in January and has shown no net change since October. The number of unemployed persons, at 9.0 million, was little
changed in January. (See table A-1. See the note at the end of this news release and tables B and C for information about annual population adjustments to the household
Among the major worker groups, the unemployment rate for teenagers (18.8 percent) increased in January. The jobless rates for adult men (5.3 percent), adult women
(5.1 percent), whites (4.9 percent), blacks (10.3 percent), Asians (4.0 percent), and Hispanics (6.7 percent) showed little or no change. (See tables A-1, A-2,
TheIn January, the number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged at 2.8 million. These individuals accounted for 31.5 percent of the unemployed. Over the past 12 months, the number of long-term unemployed is down by 828,000. (See table A-12.)
Total nonfarm payroll employment rose by 257,000 in January. Job gains occurred in retail trade, construction, health care, financial activities, and manufacturing. After incorporating revisions for November and December (which include the impact of the annual benchmark process), monthly job gains averaged 336,000 over the past
3 months. (See table B-1 and summary table B. See the note at the end of this news release and table A for information about the annual benchmark process.)
Employment in retail trade rose by 46,000 in January. Three industries accounted for half of the jobs added–sporting goods, hobby, book, and music stores (+9,000);
motor vehicle and parts dealers (+8,000); and nonstore retailers (+6,000).
Construction continued to add jobs in January (+39,000). Employment increased in both residential and nonresidential building (+13,000 and +7,000, respectively).
Employment continued to trend up in specialty trade contactors (+13,000). Over the prior 12 months, construction had added an average of 28,000 jobs per month.
In January, health care employment increased by 38,000. Job gains occurred in offices of physicians (+13,000), hospitals (+10,000), and nursing and residential
care facilities (+7,000). Health care added an average of 26,000 jobs per month in 2014.
Employment in financial activities rose by 26,000 in January, with insurance carriers and related activities (+14,000) and securities, commodity contracts,
and investments (+5,000) contributing to the gain. Financial activities has added 159,000 jobs over the past 12 months.
Manufacturing employment increased by 22,000 over the month, including job gains in motor vehicles and parts (+7,000) and wood products (+4,000). Over the past
12 months, manufacturing has added 228,000 jobs.
Professional and technical services added 33,000 jobs in January, including increases in computer systems design (+8,000) and architectural and engineering
In January, employment in food services and drinking places continued to trend up (+35,000). In 2014, the industry added an average of 33,000 jobs per month.
Employment in other major industries, including mining and logging, wholesale trade, transportation and warehousing, information, and government, showed little
change over the month.
The report also showed big revisions for the jobs numbers for both November and December. November’s job creation numbers were revised from +353,000 to +423,000, and December’s numbers were revised from +252,000 to +329,000. That gives us an average of 336,000 jobs created over the past three months, pending future revisions for both December and January. January’s number was also consistent with the average for 2014 as a whole, a year during which the economy added an average of 250,000 new jobs per month over the course of the year. That’s the strongest yearly jobs growth we’ve seen since Bill Clinton was President, and appears to be at least somewhat consistent with other statistics that show the economy as a whole growing steadily. The report also showed that Labor Force Participation edged up slightly off of a 38 year low, suggesting that people who had been sitting on the sidelines of labor market are starting to stick their toes back in the water and look for work, which itself seems to be the reason that both the U-3 and U-6 unemployment numbers edged up slightly last months notwithstanding the jobs growth.
There was also some slightly good news in another part of the monthly report that has drawn increasing attention, the numbers focusing on the length of the work week and average wages:
The average workweek for all employees on private nonfarm payrolls was unchanged at 34.6 hours in January. The manufacturing workweek edged up by 0.1 hour to 41.0 hours, and factory overtime edged down by 0.1 hour to 3.5 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged down by 0.1 hour to 33.8 hours. (See tables B-2 and B-7.)
In January, average hourly earnings for all employees on private nonfarm payrolls increased by 12 cents to $24.75, following a decrease of 5 cents in December. Over the year, average hourly earnings have risen by 2.2 percent. In January, average hourly earnings of private-sector production and nonsupervisory employees increased by 7 cents to $20.80. (See tables B-3 and B-8.)
The uptick in hourly earnings follows several months of stagnation on that front and may signal the beginning of a trend in which wages will slowly inch up, a factor that, along with declining energy prices, is likely to help stimulate consumer spending. One caveat to these numbers, though, is the fact that the decline in energy prices has led several domestic energy providers to announce layoffs over the coming months that could end up impacting as many as 20,000 workers. If that comes to pass, or if further declines in energy prices lead these employers to slow operations down even further, then we could see that have an impact on overall jobs numbers. Of course, the positive economic impact of declining energy costs cold lead to expanded hiring in other sectors that offsets these losses, and the end of winter in the Midwest and Northeast is likely to lead to expanded hiring in the construction field as well. In any case, at least in the short term these are positive numbers that hopefully indicate that the strong jobs numbers we saw in 2014 will continue into 2015.