The Corner

Two Dismal Months in a Row: 113,000 Jobs Added in January

After a very weak jobs report in December, the U.S. labor market didn’t do much better in January: It added just 113,000 jobs on a seasonally adjusted basis, noticeably less than the 170–180,000 forecast. 

These numbers can be highly volatile and often get revised, but December’s extremely poor showing (74,000 jobs) was barely updated (does 75,000 jobs make you feel better?). At the time, it was attributed to the weather, which can especially impact construction employment, and there seems to have been some case for that, because construction employment did rebound this month by 48,000 jobs. But even taking that into account, December was a weak month, and January is just as weak. There’s not an obvious reason why.

The unemployment rate dropped, however, to 6.6 percent, because the alternative measure of jobs created to calculate that, a survey of households rather than business hiring, found more than 600,000 more people employed this month versus last. This is probably a more problematic measure as, each January, the population numbers used to calculate the household survey are updated.

Also based on that survey, the labor-force-participation rate did rebound in January, from a 30-plus-year low of 62.8 percent, to 63 percent, while the employment-to-population ratio rebounded, too. This is definitely good news, assuming that survey is reliable this month.

Some economists and politicians worried that December 31 expiration of extended unemployment benefits for 1.1 million Americans, which require someone to keep searching for work in a way that the government counts them in the labor force, would lead to some of them dropping out entirely.

We simply don’t know yet whether that’s happened: Benefits expired at the end of December, the Bureau of Labor Statistics collected this data in the second week of January, and to be out of the labor force then, one has to have not looked for a job for four weeks. So if the long-term unemployed said they looked for a job in late December because they wanted to remain eligible for the benefits that could be extended, but then haven’t looked in January, if they answered the survey right (a big if) they would be counted as unemployed and in the labor force — not having left it altogether.  The rising labor-force participation, if the household survey isn’t too screwy because of population adjustments, suggests that that’s mostly what happened, and we won’t see the effects for another month.

One interesting note: The initial December jobs report found health-care jobs were lost that month for the first time in years. That was revised away, and the BLS now says we lost health-care jobs in January. The bottom line, an interesting story to follow: 2013 had the weakest growth for health-care jobs, at 204,000 added, since 1999.

Patrick Brennan — Patrick Brennan is a writer and policy analyst based in Washington, D.C. He was Director of Digital Content for Marco Rubio's presidential campaign, writing op-eds, policy content, and leading the ...

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