The economy added just 113,000 jobs in January. The average
prediction by economists surveyed by Bloomberg was for a gain of 180,000. The
weak report is better than the 74,000 jobs created last month, which was the
worst month of job creation in three years, but it shows December’s weakness
was more than just an aberration. The hope was that historically bad weather in
December led to a bizarrely low number that would soon get revised up. After
two straight months of big misses on the jobs front, though, it’s not just the
cold weather that’s slowing down hiring. Part of the drag is that the
government keeps shedding workers. While the private sector added 142,000 jobs
last month, government payrolls shrank by 29,000. Those cuts were pretty evenly
distributed between the federal government, which lost 12,000 jobs, and local
government, which cut 11,000 jobs, 8,700 of which were to local education staff.
Despite that, the labor force did grow by 499,000 people, raising the
participation rate ever so slightly to 63 percent, from 62.8 percent in December.
According to the household survey, total employment grew by 616,000, pushing
down the unemployment rate for the right reason for a change, as a smaller
share of people in the labor force were not unemployed. Still, it’s not exactly
what the Federal Reserve wanted to see when it said in 2012 that it would keep
short-term interest rates near zero as long as unemployment remained above 6.5
percent.
I do find it interesting that while they mention the decrease in the unemployment rate, the increase in the participation rate, and also give definitive numbers for those, they touch briefly on how some people left the labor force, and don't mention any actual amount of statistics. It also seems like it's promising that construction was one of the industries that had a strong month. Hopefully, this would continue to be on the rise as the weather warms up and more construction would be possible, as evidenced by the Jaywalk here that had to halt construction due to the weather.
ReplyDeleteIt is interesting how in today’s world natural externalities are taken into account of economic statistics. I agree that weather can have some effects on labor statistics, however there has always been cold weather in the winter season. This makes me wonder what factors other than weather affected these results and if the correlation to weather is being made to make more of an excuse for the recent high unemployment rates and other stagnant results of hourly wages and hours in the work week.
ReplyDeleteEmployment statistics are interesting to analyze because so many different factors affect the results. For instance the rise in the labor force participation rate from 62.8% to 63% must have been a large influence on the unemployment rate falling from 6.7% to 6.6% last month. I also find it interesting that the biggest gains in jobs are coming from retail trades. This fact alone tells a lot about our current economy.