The January unemployment rate edged down to its lowest level in almost 8 years, but net job growth fell below economists’ expectations.
According to the most recent monthly report from the Bureau of Labor Statistics (BLS), the private sector netted 158,000 nonfarm job gains in January. Local, state and federal governments lost 7,000 jobs, resulting in 151,000 total net job gains. Economists had expected around 190,000 total net job gains, according to various sources.
The unemployment rate dipped from 5.0 to 4.9 percent in January. That’s the lowest rate since February of 2008 when it was also 4.9 percent, but beginning to rapidly rise toward the recessionary high of 10.0 set in October 2009.
The private sector has now gained nonfarm jobs for 71 consecutive months since the Great Recession. The unemployment rate has dropped 5.1 percentage points from the recessionary high.
The BLS also revised job gains for November and December 2015, showing that the economy netted 2,000 fewer jobs than the BLS had previously estimated for the two months. Even so, net job gains have averaged 231,000 per month over the past three months.
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The retail trade gained 58,000 jobs in January, after gaining virtually none in December. The industry has netted 301,000 job gains over the past year.
Food services and drinking places employment rose by 47,000 in January. The industry has added 384,000 jobs over the past year.
At 37,000, job growth continued in health care. Over the past year, the industry has added 470,000 jobs. Much of the industry’s steady job growth over the past few years, even throughout the Great Recession, is attributable to the increasing medical demands of aging baby boomers and the ever-growing obesity epidemic, and to provisions in the Affordable Care Act (“Obamacare”) as well.
Manufacturing, an industry that economists consider to be a gauge of labor-market health, had net gain of 29,000 in January after few gains throughout 2015. Construction, also a measure of labor-market health, gained 18,000 jobs after gaining 65,000 in November and 48,000 in December. (See Table B by the BLS for more job numbers listed by industry.)
Among the major work groups tracked by the BLS, teenagers again suffered the highest unemployment rate (16.0 percent) followed by blacks (8.8), Hispanics (5.9), adult men (4.5), adult women (4.5), whites (4.3) and Asians (3.7, not seasonally adjusted). Adult men and whites saw their unemployment rates drop slightly in January.
Workers who are 25 years of age or older and who have earned four-year college degrees or higher experienced a 2.5 percent unemployment rate in January, the same rate since June 2015. Those in the same age group and who don’t have high school diplomas suffered a much-higher 7.4 percent rate, the highest rate since September 2015 when it was 7.7. (See Table A-5 by the BLS for more information about the unemployment rate by education level.)
The unemployment rate, now at 4.9 percent, has dropped by 0.8 percentage points in the past year. Economists consider an unemployment rate of 5.0 percent to be normal and a sign of a healthy economy.
The number of workers that the BLS counted as unemployed in January was 7.8 million, little changed from the month before. The number of unemployed workers has decreased by 1.1 million in the past year.
The count of unemployed workers does not include those 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 in January was 6.0 million, little changed from December. The number of workers who are involuntarily working only part time has declined by 796,000 in the past year.
The average workweek for all part-timers and full-timers in the private sector in January rose by 0.1 hour to 34.6 hours. Their average hourly earnings rose by 12 cents to $25.39. Average hourly earnings have risen by 2.5 percent in a year. Average hourly earnings increased by 6 cents to $21.33 in January, for private-sector production and nonsupervisory employees.
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 simply are no jobs — at least not for them.
The number of marginally-attached workers in January was 2.1 million, up from 1.8 million in December. Among the marginally-attached, 623,000 were so-called “discouraged workers” because they gave up looking for work due to their shared perception that there are no jobs. The number of discouraged workers was down by 40,000 from the 663,000 that the BLS initially reported for 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 without jobs for 27 weeks or longer, was 2.1 million in January, the same as in December. These workers accounted for 26.9 percent of the unemployed. Standard state unemployment benefits last only up to 26 weeks without extensions.
If you are a recent victim of job loss or a reduction in work hours resulting from the 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.
For more details about the January 2016 unemployment rate and job numbers, see the “Employment Situation Summary” by the BLS. The BLS plans to report the February 2016 unemployment rate and job numbers on March 4. To receive notification like the above automatically, subscribe to Employee Rights Blog for free.
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Except where otherwise noted, 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.