As we do every month, we take a closer look at the monthly jobs report, released the first Friday of the month. January saw the national unemployment rate increase from 7.8% to 7.9%. Looking into the data, there are few signs of growth. In short, much like December, January saw the labor market remain in neutral.
The Civilian Participation Rate Remained at 63.6%
As loyal readers will know, I think this particular data point is one of the most important in all of the household survey data, second only the unemployment rate itself. This rate, which measures the percentage of the population in the workforce, has stayed near record lows for the past year, with no movement at all in the past three months. While this shows that the labor force is not contracting further, it also shows that the people who have left are not returning.
In a recovering economy, this rate would increase, as those who left the workforce for economic reasons begin to rejoin it. It is possible that enough may rejoin at once that it would actually push up the unemployment rate, despite a recovering economy, at least temporarily. However, January’s increase in the unemployment rate cannot be attributed to this.
The Total Number of Unemployed Increased by 100k
January also marked the third straight month of increases in the number of unemployed, with nearly 300,000 additional since November. Looking at the data, since the number of people not in the work force actually increased over the month, it does not appear that these people joining the ranks of the unemployed are coming from those reentering the workforce.
Establishment Data Shows 157,000 non-Farm Jobs Created
The Establishment Survey, seen as the more accurate survey of job creation, showed 157,000 jobs were created in January. The biggest gainers were in Construction, with 28,000, Leisure and Hospitality at 23,000, Retail Trade at 32,600, Health Care with 22,000. The biggest decline in employment was seen in Transportation and Warehousing with 14,000 jobs lost. Most industries and sectors saw nominal job growth for the month.
While 157,000 new jobs created over the month is enough to keep up with natural population growth, it is not enough to begin to chip away at the large pool of unemployed.
The Revised Unemployment Rate for January, with methodology here, is 9.0%, unchanged from the December rate.