WASHINGTON (MaceNews) – Let us count the ways January’s jobs report topped expectations, beginning with the 225,000 payroll additions and a labor participation rate that was the highest since June 2013, a surge in construction employment and wages that rebounded to a less anemic 3.1% increase over the year.
More broadly, rather than a one-month fluke, the Bureau of Labor Statistics tally showed the three-month average gain in payrolls at 211,000, a jump above the average of 175,000 for all of 2019.
The unemployment rate worsened by a tenth, to 3.6%, a negligible increase back to what it was in October and four tenths below a year earlier. Icing on the cake was the upward revisions in the previous two months, a relatively modest 7,000 increase.
The annual benchmark revisions, involving the subtraction of more than half a million jobs through March, brought 2019’s gains in payrolls down to 2,096,000 from the previous 2,108,000.
The worst number in the report was the 12,000 decline in manufacturing payrolls, with almost all of the losses in motor vehicles and parts, a development certainly not unexpected since the category, in the words of the report, “has shown little movement, on net, over the past 12 months.” Layoffs among Boeing suppliers alone has been a major negative factor.
The underpinnings of the January jobs report showed those counted as dropouts from the labor force diminished by 729,000 while the labor force increased by 50,000, positive developments that buttressed the validity of the historically low unemployment rate that sometimes benefits from labor force shrinkage.
Those employed were down 89,000 and the unemployed rose by 139,000, reverses that weighed on the unemployment rate only slightly.
Perhaps the most surprising development was the two-tenths strengthening of the labor participation rate, a move against the tide of Boomer retirements and of the expectation for a continued long-term decline due to several factors, including the aging of the workforce. Instead the report reflected a modest increase in new entrants to paid employment.
The rebound to a 3.1% increase in the primary measure of hourly wages, from December’s 2.9%, was welcome, yet did nothing to alter the continual disappointment and air of mystery about why an evidently tight labor market doesn’t push wages up faster. The weekly initial claims data updated Thursday with another half-century low number of 202,000 suggests employers want to keep staff onboard. Yet they are not being broadly pushed to make pay more enticing to supplement their staff rosters.
The month’s most notable job gains occurred in construction (+44,000), in health care (+36,000), and in transportation and warehousing (+28,000)..