January

The U.S. Bureau of Labor Statistics (BLS) released its employment / unemployment report for January on February 7^th.

Last month we told you that the employment report was not as bad as the media tried to paint it. This month The New York Times is saying “Job Growth Gives the Economy an Upbeat Start to the Year” while Marketwatch calls the Labor Market “Astounding” and once again we have a slightly different opinion.

Yes, we are still in record low territory and that won’t change overnight. Seasonally adjusted Unemployment only notched up 1/10^th of a percent and the Labor Force Participation Rate (LFPR) has entered territory that it hasn’t seen in years… BUT the unadjusted numbers jumped up significantly (as they do every year) and the BLS adjusted the Population numbers DOWN significantly. This adjustment is what the pundits are not seeing and what makes me think the numbers may not be quite as good as they appear i.e. lower population means a higher percentage appears to be working (even though the actual unadjusted employment fell). This could have given the LFPR the apparent boost and made the Adjusted U-3 increase by less than it would have without the population adjustment. This is still not a bad employment report just perhaps not as rosy as the media made it sound.

Key January Employment and Unemployment Numbers

• Unadjusted U-3 Unemployment-  4.0% Up from December’s 3.5%… Typically up in January, it was 4.4% in January 2019.
• Adjusted U-3 Unemployment-    3.6% Up from 3.5% in December.
• Unadjusted U-6 Unemployment-  7.7% Up from 6.7% in December… was 8.8% in January 2019.
• Unadjusted Employment (Establishment Survey)- 150.102 million down from 152,934 in December.
• Labor Force Participation Rate- 63.4% Up from 63.2%.

According to the Commissioner of the U.S. Bureau of Labor Statistics:

Nonfarm payroll employment rose by 225,000 in January, and the unemployment rate was little changed at 3.6 percent.
Notable employment gains occurred in construction, in health care, and in transportation and warehousing.
In 2019, job growth averaged 175,000 per month.

Of course, he is talking about “Seasonally Adjusted Jobs” from the “Current Population Survey (CPS)”
rather than looking at the results reported by actual companies in their “Current Employment Statistics survey (CES)” which showed a non-adjusted drop of 2.8 million jobs.

For more info see our Current Unemployment Chart and Current U.S. Employment Chart commentary.

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