February 05, 2016
The economy added 151,000 jobs in January, in line with some economists’ expectations. There were largely offsetting revisions to the prior two months data leaving the average change over the last three months at 231,000. The slowing was sharpest in construction, which added 18,000 jobs after adding an average of 56,500 jobs in the prior two months. The temp sector lost 25,000 jobs in January after a reported gain of the same size in December. The big job gainers were restaurants, which added 46,700 jobs, health care with a gain of 36,800, and retail with a gain of 57,700. Both restaurants and retail were likely helped by unusually good weather. (The storms hit after the survey period.)
On the household side, there was another large increase in labor force participation, with 284,000 entering the labor force, after adjusting for changes in population controls. Employment rose by 409,000 after the adjustment. Other news in the household survey was mixed. The number of involuntary part-time workers fell again and is now down by almost 800,000 over the last year. The number of people who choose to work part-time rose slightly. It is now up by almost 500,000 from its year ago level. This is a predictable effect of the ACA as people no longer need to work full-time to get health care insurance through their jobs.
On the negative side, the unemployment rate for African Americans by rose by 0.5 percentage points and for African American teens by 1.5 percentage points. This indicates the drop in December was a blip. The percentage of unemployment due to voluntary job leavers also dropped in January, indicating a lack of confidence in the labor market.
There was a large 12 cent jump in the average hourly wage in January, but this followed a month in which there was no reported rise at all. Over the last three months the wage has risen at a 2.5 percent annual rate compared to the prior three months, the same as its pace over the last year. There is little basis for believing there is any notable increase in wage growth.
