The January employment report showed the employment-to-population ratio (EPOP) rising from 58.6 percent to 58.8 percent. This matches the previous high for the recovery in October of 2012. The household survey showed employment rising by 638,000 after increasing just 101,000 over the prior two months. Interestingly the growth was concentrated among younger workers. Employment for workers between the ages of 25-34 rose by 230,000, while employment for workers between the ages of 44-54 rose by 318,000, a one month increase of more than 1.0 percent. Whites disproportionately benefited from the rise in employment with the  EPOP for both white men and white women rising by 0.4 percentage points.

The establishment survey was not nearly as positive, showing an increase of just 113,000 workers following last month's weak 75,000 gain.

Interestingly, the goods-producing industry accounted for the bulk of the growth with construction showing a gain of 48,000 jobs following a decline of 22,000 in December. The private service sector as a whole had a gain of just 66,000, its weakest since June of 2012. Especially noteworthy was a drop of 0.4 thousand jobs in health care. This figure, combined with December's weak 2,400 gain is the weakest two month period on record.

While the rise in EPOPs in the household data is very good news, the poor job showing in the establishment survey over the last two months is a real basis for concern about the strength of the labor market going forward.