The U.S. unemployment rate unexpectedly dropped to its lowest level in nearly three years last month, as the economy added more jobs than it had since April.
According to data that the U.S. Bureau of Labor Statistics (BLS) released today, the January unemployment rate dropped to 8.3 percent from 8.5 in December while the economy gained 243,000 nonfarm jobs.
The private sector gained 257,000 nonfarm jobs, but continuing government layoffs dropped the net gain to 243,000. The private sector has now gained jobs for 23 consecutive months, with total nonfarm employment showing net job gains in each of the last 16 of those months.
At 70,000, the most notable January net job gains were in the professional and business services industry, with 33,000 occurring in employment services. Next in line was manufacturing, an industry that analysts consider to be a gauge of labor-market health. Manufacturing gained 50,000 jobs, the most since January 2011, with durable goods adding 44,000.
Employment in leisure and hospitality increased by 44,000, with 33,000 occurring in food services and drinking places. Food services has added 487,000 jobs since a low in February 2010.
Health care continued its long-term upward trend by netting 30,900 jobs. Much of the industry’s continued job growth over the past few years is attributable to the increasing medical demands of aging baby boomers and the obesity epidemic, and to provisions in President Obama’s Affordable Care Act as well.
Construction, also a measure of labor-market health, gained 21,000 jobs in January after gaining 31,000 in December. Nonresidential specialty trade contractors added 30,000 jobs over the past two months.
Among the major work groups tracked by the BLS, teenagers again suffered the highest unemployment rate (23.2 percent) followed by blacks (13.6), Hispanics (10.5), adult women (7.7), adult men (7.7), whites (7.4) and Asians (6.7, not seasonally adjusted). Blacks, Hispanics and adult men saw the largest decreases while the rest saw little change.
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The January unemployment rate of 8.3 percent was the lowest since February 2009, when it was also 8.3. The rate has now dropped in each of five consecutive months while remaining below 9.0 percent in the last four. It had been stubbornly stuck at or above 9.0 from May 2009 through September 2011, except for 8.9 in March 2011.
Just a few days ago, the nonpartisan Congressional Budget Office estimated that the unemployment rate (“jobless rate”) would rise to 8.9 percent by the end of 2012 and then to 9.2 in 2013. In an earlier report last August, the CBO estimated a jobless rate of 8.5 percent by the end of 2012.
The unemployment rate does 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 8.2 million in January, up by 0.1 from December. The average workweek for both part-timers and full-timers remained at 34.5 hours, while their average hourly earnings increased four cents to $23.29.
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 unemployed workers in January was 2.8 million, up from 2.5. Among the marginally-attached, 1.1 million 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 up from 945,000.
The BLS counted 12.8 million workers as unemployed in January. That was down from 13.1 million and thus, why the unemployment rate dropped too.
The number of long-term unemployed workers, those who have been unemployed for 27 weeks or longer, dropped from 5.6 to 5.5 million in January and accounted for 42.9 percent of all unemployed workers. Standard state unemployment benefits last only up to 26 weeks without extensions.
President Obama signed a new law that stretches out eligibility for the 2011 unemployment benefit extensions until early March 2012. The law also extends the 2011 payroll tax cut for two months into 2012.
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 2012 unemployment rate and related matters, see the “Employment Situation Summary” by the BLS. The BLS plans to report the February 2012 unemployment rate on March 9. To receive notification like this automatically, subscribe to Employee Rights Blog for free.
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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.
