The economy gained far fewer jobs than economists had expected in January, but the U.S. unemployment rate edged down to its lowest level in just over five years.
According to the most recent monthly report from the Bureau of Labor Statistics (BLS), the unemployment rate dropped 0.1 percentage point to 6.6 percent in January. The private sector gained 142,000 jobs while local, state, and federal governments netted job losses of 29,000. Subsequently, the economy netted 113,000 nonfarm jobs in total.
Analysts had expected up to 185,000 net job gains in January, according to CNN, but unusually cold weather again put a big dent in that number. The unemployment rate dropped to its lowest level since October 2008, when it was 6.5 percent and beginning to skyrocket toward the recessionary high of 10.0.
The BLS also revised its job numbers for November and December, showing that the economy gained more jobs than previously reported. November was revised from 241,000 to 274,000 while December was revised from 74,000 to 75,000, for a total of 34,000 more jobs than the BLS had previously reported.
The private sector has now gained nonfarm jobs for 47 consecutive months, with total nonfarm employment (private sector, plus or minus government) showing net job gains in each of the last 40 of those months. After BLS revisions, the U.S. economy netted an average of 194,000 nonfarm jobs per month in 2013, a bit more than in 2012 when the economy averaged 183,000 per month.
At 48,000, the most notable January net job gains were in the construction industry (despite the unusually cold weather). Within the industry job gains occurred in residential and nonresidential building, nonresidential specialty trade contractors, and heavy and civil engineering construction.
Next in line was the professional and business services industry, with 36,000 net job gains. Professional and technical services netted 20,000 jobs while temporary help services (“temp workers”) netted 8,100. The industry gained an average of 55,000 jobs per month in 2013.
The leisure and hospitality industry added 24,000 jobs in January. Job growth in the industry averaged 38,000 per month in 2013.
The manufacturing industry gained 21,000 jobs. Machinery, wood products, and motor vehicles and parts all netted jobs. The manufacturing industry created an average of only 7,000 jobs per month in 2013.
The wholesale trade industry added 14,000 jobs. At 10,000, most of the job gains occurred in nondurable goods.
The retail trade industry lost 12,900 jobs in January, likely at least partly due to laying off temporary holiday workers.
Among the major work groups tracked by the BLS, teenagers again suffered the highest unemployment rate (20.7 percent) followed by blacks (12.1), Hispanics (8.4), adult men (6.2), adult women (5.9), whites (5.7) and Asians (4.8, not seasonally adjusted). No group experienced a significant change in their unemployment rate from December except for Asians, who saw a 0.7 percent increase.
Workers who are 25 years of age or older and who have earned four-year college degrees or higher experienced a 3.2 percent unemployment rate in January, down slightly from 3.3 in December. Those in the same age group and who don’t have high school diplomas suffered a 9.6 percent rate, down from 9.8 in December.
The 0.1 percentage point drop in the January unemployment rate was at least partly because fewer unemployed workers were looking for jobs, probably due to the holiday, unusually cold weather and baby boomers retiring. For the BLS to count workers as unemployed, they must be actively seeking jobs in the four weeks preceding the count.
The BLS counted 10.2 million workers as unemployed in January, down by 115,000 from December. That count and the unemployment rate do not include workers who are involuntarily working only part time and with fewer benefits, if any, such as no health insurance, because they can’t find full-time jobs or employers cut their work hours. The number of involuntarily part-timers was 7.3 million, down by 514,000 from December.
The average workweek for both part-timers and full-timers was unchanged at 34.4 hours. Average hourly earnings rose by 5 cents to $24.21. Average hourly earnings have risen by 46 cents (1.9 percent) in a year.
The unemployment rate also does not include “marginally-attached” unemployed workers. The BLS does not count them in the official rate because they stopped looking for work in the four weeks preceding the count, for reasons such as school attendance, family matters or their collective perception that there are no jobs.
The number of marginally-attached workers in January was 2.6 million, up from 2.4 million in December. Among the marginally-attached, 837,000 were so-called “discouraged workers” because they gave up looking for work due to their shared perception that there are no jobs — at least not for them. The number of discouraged workers was down from the 917,000 that the BLS initially reported in December. (The BLS does not seasonally adjust any of the figures in this paragraph.)
The number of long-term unemployed workers, those who have been unemployed for 27 weeks or longer, was 3.6 million in January, down by 232,000 from December. These workers accounted for 35.8 percent of the unemployed. Standard state unemployment benefits last only up to 26 weeks without extensions.
As of the publish date of this blog, Congress has failed to further extend unemployment benefit extensions into 2014. As a result, roughly 1.7 million long-term unemployed workers have lost their extended unemployment benefits. (See the blog “Unemployment Benefit Extensions 2013 - Updated for 2014” for updates on the 2014 extensions.) Meanwhile, President Obama announced that more than 300 companies have agreed not to discriminate in hiring Americans who have been unemployed for six months or more.
If you are a recent victim of job loss or a reduction in work hours resulting from the high unemployment rate, then you might be eligible to collect full or partial unemployment benefits from the state unemployment office. You might also be eligible to continue your employer-provided group health insurance coverage through COBRA. To look for a new job, start at the Job Search page.
For more details about the January 2014 unemployment rate and related matters, see the “Employment Situation Summary” by the BLS. The BLS plans to report the February unemployment rate and job numbers on March 7. To receive notification like the above automatically, subscribe to Employee Rights Blog for free.
- - -
Certain figures in this unemployment rate report were rounded and/or seasonally adjusted by the BLS, and are subject to revision by same (based on additional data that was not initially available). The unemployment rate chart pictured above was provided by the BLS.