February 06, 2015
The Labor Department reported that the economy added 257,000 new jobs in January. With upward revisions to the prior two months’ data, this brings the average over the last three months to 336,000 jobs. The growth was widely spread across industries, but it is noteworthy that the goods producer sector remained strong. Construction added 39,000 jobs, bringing the average over the prior three months to 37,700.
Manufacturing added 22,000 jobs bringing the average over the last three months to 31,000. Retail added 45,900 jobs in January, while health care added 38,300. The latter figure continues an uptick in job growth in the health care sector since the fall. Job growth had been averaging less than 25,000 a month in 2013 and the first half of 2014.
There was a 12 cent jump in average hourly pay, but this reflects the erratic movement of this series, not a real development in the economy. Taking the last three months together, compared with the prior three months, wages have grown at just a 2.0 percent annual rate, down from a 2.2 percent increase over the last year. In other words, there is still no real evidence of wage acceleration in the data.
The household side was mostly positive as well. The unemployment rate was essentially unchanged at 5.7 percent. Adjusting for changes in population controls, employment still rose by 435,000 in January. The situation for most groups was little changed. It is striking that less-educated workers continue to be the largest beneficiaries of the recovery. In the last year, the employment rate (EPOP) for workers without high school degrees has risen by 2.1 percentage points, while their unemployment rate has dropped by 1.1 percentage points. High school grads have seen a similar drop in their unemployment rates, although their EPOP has risen by just 0.2 percentage points. By contrast, the unemployment rate for college grads has fallen by 0.5 percentage points, while their EPOP has dropped by 0.7 percentage points. The unemployment rate for college grads is still 0.8 percentage points above its average for 2007.
