US Labor Market Improved In January
CHAPEL HILL, NC (February 6, 2015) – In January, the national labor market added 257,000 more jobs than it lost due entirely to gains in the private sector. After accounting for annual statistical updates, the unemployment rate (5.7 percent) and the number of unemployed persons (9 million) basically were unchanged in January from the prior month.
“January was the 52nd-straight month in which the United States experienced net job growth,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Over the year, the economy netted an average of 267,000 jobs per month, a pace that has mitigated but has not undone the damage inflicted to the labor market by the last recession.”
In January, the nation’s employers added 257,000 more payroll jobs than they cut. All of the gain originated in the private sector (+267,000), while public employers cut 10,000 more positions than they added. Within the private sector, payroll levels increased the most in the trade, transportation, and utilities sector (+51,000, with 90 percent of the gain occurring in the retail trade subsector), followed by the education and health services (+46,000) and the construction and professional business services sectors (both +39,000). Payroll levels in all other major industry groups rose in January or essentially held steady.
Additionally, the payroll employment numbers for November and December underwent revisions; with the updates, the economy netted 752,000 jobs over those two months, not the 605,000 positions previously reported. With those changes, the average pace of monthly job growth in the United States recorded over the past year rose to 267,000.
“The United States has experienced steady job growth for over four years, but the pace of growth has been modest relative to the country’s needs,” noted Quinterno. “While the United States has more payroll jobs than it did in December 2007, the current average monthly rate of job growth is insufficient to close the jobs gap caused by the recession anytime soon.
After accounting for annual statistical updates, labor market conditions as measured by the household survey improved in January. In January, the number of Americans who were employed increased by 435,000 persons. At the same time, the overall size of the labor force rose by 703,000 persons. Meanwhile, the share of working-age Americans participating in the labor force rose in January (62.9 percent), while the share of working-age Americans with a job was unchanged (59.3 percent).
In January, 9 million Americans were unemployed (5.7 percent). Another 6.8 million individuals worked part time despite preferring full-time positions. An additional 682,000 individuals (not seasonally adjusted) were so discouraged about their job prospects that they had stopped searching for work altogether; those persons were part of a larger population of 2.2 million Americans who were marginally attached to the labor force.
Last month, the unemployment rate was higher for adult male workers than adult female workers (5.3 percent versus 5.1 percent). Unemployment rates were higher among Black (10.3 percent) and Hispanic workers (6.7 percent) than among white ones (4.9 percent). The unemployment rate among teenagers was 18.8 percent.
Additionally, 5.3 percent of all veterans were unemployed, and the rate among recent veterans (served after September 2001) was 7.9 percent. At the same time, 11.9 percent of Americans with disabilities were jobless and seeking work. (Both not seasonally adjusted.)
Jobs remained comparatively hard to find in January. Last month, the underemployment rate equaled 11.3 percent. Among unemployed workers, 31.5 percent had been jobless for at least six months, and the average spell of unemployment equaled 32.3 weeks.
In January, the leading cause of unemployment remained a job loss or the completion of a temporary job, which was the reason cited by 47.4 percent of unemployed persons. Another 31.6 percent of unemployed persons were re-entrants to the labor market, while 11.5 percent were new entrants. Voluntary job leavers accounted for the remaining 9.5 percent of the total.
“The January employment report contained a number of positive developments, although annual technical updates to the various data series complicate the process of drawing meaningful conclusions,” observed Quinterno. “Labor market conditions nevertheless remain sub-optimal, with the problems of underemployment and long-term unemployment remaining particularly pronounced. Weak conditions, in turn, are preventing American workers from experiencing robust improvements in their wages and living standards.”