by Calculated Risk on 2/02/2024 09:28:00 AM

This was a very strong report; however, the benchmark revision showed job growth was slower over the last year than originally reported. Including revisions:  The 3.06 million jobs added in 2023 was the 17th best year for job growth in US history (out of 84 years) following the two best years on record (2021 and 2022).

The headline jobs number in the January employment report was well above expectations, and November and December payrolls were revised up by 126,000 combined.  The participation rate was unchanged, the employment population ratio increased, and the unemployment rate was unchanged at 3.7%.

Leisure and hospitality gained 11 thousand jobs in January.  At the beginning of the pandemic, in March and April of 2020, leisure and hospitality lost 8.2 million jobs, and are now down 75 thousand jobs since February 2020.  So, leisure and hospitality has now added back about 99% all of the jobs lost in March and April 2020. 

Construction employment increased 11 thousand and is now 522 thousand above the pre-pandemic level. 

Manufacturing employment increased 23 thousand jobs and is now 199 thousand above the pre-pandemic level.

Earlier: January Employment Report: 353 thousand Jobs, 3.7% Unemployment Rate

Prime (25 to 54 Years Old) Participation

Since the overall participation rate is impacted by both cyclical (recession) and demographic (aging population, younger people staying in school) reasons, here is the employment-population ratio for the key working age group: 25 to 54 years old.

The 25 to 54 years old participation rate increased in January to 83.3% from 83.2% in December, and the 25 to 54 employment population ratio increased to 80.6% from 80.4% the previous month.

Both are close to the pre-pandemic levels.

Average Hourly Wages

The graph shows the nominal year-over-year change in "Average Hourly Earnings" for all private employees from the Current Employment Statistics (CES).  

There was a huge increase at the beginning of the pandemic as lower paid employees were let go, and then the pandemic related spike reversed a year later.

Wage growth has mostly trended down after peaking at 5.9% YoY in March 2022 and was at 4.5% YoY in January.   

Part Time for Economic Reasons

From the BLS report:

"In January, the number of people employed part time for economic reasons, at 4.4 million, changed little. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs."

The number of persons working part time for economic reasons increased in January to 4.42 million from 4.21 million in December. This is slightly above pre-pandemic levels.

These workers are included in the alternate measure of labor underutilization (U-6) that increased to 7.2% from 7.1% in the previous month. This is down from the record high in April 2020 of 23.0% and up from the lowest level on record (seasonally adjusted) in December 2022 (6.5%). (This series started in 1994). This measure is close to the 7.0% level in February 2020 (pre-pandemic).

Unemployed over 26 Weeks

This graph shows the number of workers unemployed for 27 weeks or more.

According to the BLS, there are 1.277 million workers who have been unemployed for more than 26 weeks and still want a job, up from 1.245 million the previous month.

This is down from post-pandemic high of 4.174 million, and up from the recent low of 1.050 million.

This is close to pre-pandemic levels.

Job Streak

Through January 2024, the employment report indicated positive job growth for 37 consecutive months, putting the current streak in 5th place of the longest job streaks in US history (since 1939).

Headline Jobs, Top 10 Streaks
	Year Ended	Streak, Months
1	2019	100
2	1990	48
3	2007	46
4	1979	45
5	20241	37
6 tie	1943	33
6 tie	1986	33
6 tie	2000	33
9	1967	29
10	1995	25
1Currrent Streak

Summary:

The headline monthly jobs number was well above consensus expectations, and November and December payrolls were revised up by 126,000 combined.  The annual benchmark revision indicated job growth was lower than originally reported. The participation rate was unchanged, the employment population ratio increased, and the unemployment rate was unchanged at 3.7%.

A strong employment report.