WASHINGTON — The U.S. January employment report is not as bad as the headlines, but still suggests some weakening into 2014:Q1, albeit probably partially due to less than favorable weather.
January jobs data confirm weakness, with monthly payrolls at +113,000 and November-December revisions totaling just +34,000. Private jobs look better, however, at +142,000 in January and having averaged +182,000 in the prior two months.
The overall jobs tally is now up 154,000 on average over the last three months. That is down from +201,000 on average from August to October and represents a slowing.
Benchmark revisions complicated the readings, but were pretty much as previewed. They totaled +347,000 jobs unadjusted for March 2013. The Bureau of Labor Statistics said this was a 'minor' move representing 0.3% of workers -- the same as the average benchmark over the last ten years. It still shows a recent slowing.
The unemployment rate fell 0.1 point to 6.6%, and has been on a downtrend for a year. Included were higher ratios for employment/population and labor force participation, suggesting the expiration of extended unemployment benefits did not force workers off the rolls. The key take-away from the unemployment rate is that it is still declining and moving closer to the Federal Reserve's target.
The new population controls added 24,000 to the labor force, but 22,000 of these people were employed, with no effect on the unemployment rate. After removing the population control effect, BLS estimated there were 616,000 more people employed from December 2013 to January 2014.
The "bad weather effect" is unclear. Unadjusted January jobs posted -2.87 million, but it is not unusual to see a move this big for the month, given retail layoffs, factory hiatuses, and school schedules. The adjustment produced the monthly gain, and BLS downplayed the month's harsh weather because it did not fall directly in the survey period.
The adjusted January job losses mainly were in retail at -12,900 and government at -29,000 (-14,100 in education). Construction posted +48,000, manufacturing +21,000, healthcare -400, and temporary help +8,100, all suggesting no weather effect.
Rising hours and earnings show production and incomes are rising. So the overall report is not as bad as on its face, though Q1 is off to a somewhat slow start.
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