Fewer January Jobs, But Unemployment Rate Drops

Total nonfarm payroll employment rose by just 151,000 in January, below expectations, but enough to send the unemployment rate below 5 percent for the first time since 2008, the Bureau of Labor Statistics reported Friday.

BLS also revised previous months’ payroll employment. While November’s numbers improved from 252,000 to 280,000, December numbers revised down from 292,000 to 262,000, for a net loss of 2,000. Over the past three months, job gains averaged 231,000 per month. Monthly revisions result from additional

John Silvia, chief economist with Wells Fargo Securities, Charlotte, N.C., said the downshift was consistent with slower overall GDP and industrial production growth in 2016 compared to 2015.

“Job gains themselves have moderated, although wage gains picked up,” Silvia said. “In addition, hours worked have also been disappointing this cycle given the prevalence of part-time employment as a reasonable option for many firms today. Bottom line, the pace of job growth and labor costs are consistent with a more modest pace of FOMC moves in 2016 and certainly not four rate hikes in 2016.”

BLS said the number of unemployed persons, at 7.8 million, changed little in January. Over the past 12 months, the number of unemployed persons and the unemployment rate were down by 1.1 million and 0.8 percentage point, respectively. The number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged in January, at 2.1 million, and has shown little movement since June. These individuals accounted for 26.9 percent of the unemployed. The labor force participation rate, at 62.7 percent, was also little, as was the employment-population ratio (59.6 percent).

The report said the average workweek for all employees on private nonfarm payrolls rose by 0.1 hour to 34.6 hours in January. The manufacturing workweek edged up by 0.1 hour to 40.7 hours, and factory overtime was unchanged at 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 33.8 hours.

BLS said average hourly earnings for all employees on private nonfarm payrolls increased by 12 cents to $25.39. Over the year, average hourly earnings rose by 2.5 percent. In January, average hourly earnings of private-sector production and nonsupervisory employees rose by 6 cents to $21.33.