Payroll employment rises in January (+257,000); unemployment rate changes little (5.7%)

[mahatmakanejeeves]

Last edited Fri Mar 20, 2015, 09:10 AM - Edit history (27)

Source: U.S. Bureau of Labor Statistics

Employment Situation Summary
USDL-15-0158

Transmission of material in this release is embargoed until 8:30 a.m. (EST) Friday, February 6, 2015

Technical information:
Household data: [phone] • [e-mail] • www.bls.gov/cps
Establishment data: [phone] • [e-mail] • www.bls.gov/ces

Media contact: [phone] • [e-mail]

THE EMPLOYMENT SITUATION -- JANUARY 2015

Total nonfarm payroll employment rose by 257,000 in January, and the unemployment rate was little changed at 5.7 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in retail trade, construction, health care, financial activities, and manufacturing.
....

In January, the number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged at 2.8 million. These individuals accounted for 31.5 percent of the unemployed. Over the past 12 months, the number of long-term unemployed is down by 828,000. (See table A-12.) ... After accounting for the annual adjustments to the population controls, the civilian labor force rose by 703,000 in January. The labor force participation rate rose by 0.2 percentage point to 62.9 percent, following a decline of equal magnitude in the prior month.
....

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was essentially unchanged in January at 6.8 million. These individuals, who would have preferred full-time employment, were working part time because their hours had been cut back or because they were unable to find a full-time job. (See table A-8.)

In January, 2.2 million persons were marginally attached to the labor force, down by 358,000 from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. (See table A-16.) ... Among the marginally attached, there were 682,000 discouraged workers in January, down by 155,000 from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.6 million persons marginally attached to the labor force in January had not searched for work for reasons such as school attendance or family responsibilities. (See table A-16.)

Read more: http://www.bls.gov/news.release/empsit.nr0.htm

---

[center]Welcome Back, My Friends, to the Show That Never Ends.[/center]

Good morning, Freepers and DUers alike. I especially welcome our good friends from across the aisle. You're paying for this information too, so I am absolutely delighted to have you participate in this thread. Please, everyone, put aside your differences long enough to digest the information. After that, you can engage in your usual donnybrook.

If you don't have the time to study the report thoroughly, here is the news in a nutshell:

Commissioner's Statement on The Employment Situation

It is easy to find one paragraph, or one sentence, or one datum in this report that will support the most outlandish of conclusions, from "the sky is falling" to "we'll have blue skies, nothing but blue skies, from now on." Easy, but disingenuous.

Every month, you can find something in the report that will cause you concern. One such nugget is the "labor force participation rate." Last month, "{t}he labor force participation rate rose by 0.2 percentage point to 62.9 percent, following a decline of equal magnitude in the prior month."

Take the information in context. Consider not just this month’s data, but the trend.

Please take the time to look at progree's thoughtful analysis in his reply to the thread for the December 2014 jobs report. Thank you so much for that, progree.

Job statistics - over the past month, over the past year, and since February 2010

See, as well, his not-to-be-missed thread, revised monthly. Here is the latest update:

Economy facts with links to official sources, rev 2/7/15

Let's begin with a couple of questions. Who is this Bureau of Labor Statistics, and why are they releasing all these numbers every month?

The Bureau of Labor Statistics (BLS) is a unit of the United States Department of Labor. It is the principal fact-finding agency for the U.S. government in the broad field of labor economics and statistics and serves as a principal agency of the U.S. Federal Statistical System. The BLS is a governmental statistical agency that collects, processes, analyzes, and disseminates essential statistical data to the American public, the U.S. Congress, other Federal agencies, State and local governments, business, and labor representatives. The BLS also serves as a statistical resource to the Department of Labor, and conducts research into how much families need to earn to be able to enjoy a decent standard of living.

The BLS data must satisfy a number of criteria, including relevance to current social and economic issues, timeliness in reflecting today’s rapidly changing economic conditions, accuracy and consistently high statistical quality, and impartiality in both subject matter and presentation. To avoid the appearance of partiality, the dates of major data releases are scheduled more than a year in advance, in coordination with the Office of Management and Budget.

Note carefully those words: "accuracy," "quality," and "impartiality."

Full disclosure: I do not work for BLS, nor am I friends with anyone over there. My sole connection with the agency is that I've been in the building to pick up some publications. I'm just someone who appreciates the work they do.


[center]Household Survey vs. Establishment Survey[/center]

From the February 10, 2011, DOL Newsletter:

Take Three

Secretary Solis answers three questions about how the Bureau of Labor Statistics calculates unemployment rates.

How does BLS determine the unemployment rate and the number of jobs that were added each month?

BLS uses two different surveys to get these numbers. The household survey, or Current Population Survey (CPS), involves asking people, from about 60,000 households, a series of questions to assess each person in the household's activities including work and searching for work. Their responses give us the unemployment rate. The establishment survey, or Current Employment Statistics (CES), surveys 140,000 employers about how many people they have on their payrolls. These results determine the number of jobs being added or lost.

[center]The Wall Street Journal. MoneyBeat Blog[/center]

January Jobs Report: Everything You Need to Know

8:00 am ET
Feb 6, 2015
Economy & Business


—Associated Press

Yes, it’s that time again, folks. Jobs Friday, when for one ever-so-brief moment the interests of Wall Street, Washington and Main Street are all aligned on one thing: Jobs.

The Bureau of Labor Statistics is expected to report that the economy added 237,000 jobs in January, with the unemployment rate falling to 5.5%. In December, the economy added 252,000, and the unemployment rate was 5.6%.

Here at MoneyBeat HQ, we’ll be offering color commentary and tracking the markets before and after the data crosses the wires. Feel free to weigh-in yourself, via the comments section. And while you’re here, why don’t you sign up to follow us on Twitter.

This comment was posted before the report was released:

8:18 am Part Time Vs. Full Time by Josh Mitchell



Another measure of slack, and a factor behind weak wages, is workers stuck in part-time jobs for economic reasons. There were 6.8 million of them as of December. That number has been falling, but it’s still high historically. And despite the fact that most jobs added in the recovery are full-time, such positions are still lagging. There were 119.9 million full-time positions in December–2 million fewer than the November 2007 peak.

-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --

You forgot to say "Enjoy the show."

Before we do anything else, let's give credit to the workers behind the MoneyBeat blog:

The MoneyBeat Team:

Stephen Grocer
Editor

Phillipa Leighton-Jones
European Editor

Erik Holm
Deputy Editor

Maureen Farrell
Reporter, New York

Paul Vigna
Reporter, New York

David Cottle
Reporter, London

Kristen Scholer
Reporter, New York

MoneyBeat Columnists:

Ronald Barusch
Dealpolitik

Francesco Guerrera
Current Account

Alen Mattich

Jason Zweig
The Intelligent Investor

Michael J. Casey
Horizons

E.S. Browning


[center]The Large Print Giveth, and the Fine Print Taketh Away.[/center]

A DU'er pointed out several months ago that, if I'm going to post the link to the press release, I should include the link to all the tables that provide additional ways of examining the data. Specifically, I should post a link to Table A-15. Alternative measures of labor underutilization. Table A-15 includes those who are not considered unemployed, on the grounds that they have become discouraged about the prospects of finding a job and have given up looking. Here are those links.

Employment Situation

Table A-15. Alternative measures of labor underutilization


[center]Past Performance is Not a Guarantee of Future Results.[/center]

Nonetheless, what is important is not this month's results, but the trend. Let’s look at some earlier numbers:

ADP® (Automatic Data Processing), for employment in January 2015:

ADP National Employment Report: Private Sector Employment Increased by 213,000 Jobs in January

Bureau of Labor Statistics, for employment in December 2014:

Payroll employment rises by 252,000 in December; unemployment rate declines to 5.6%

ADP® (Automatic Data Processing), for employment in December 2014 (hat tip, IDemo):

ADP Says Companies in U.S. Added 241,000 Workers in December

Bureau of Labor Statistics, for employment in November 2014:

Payroll employment increases by 321,000 in November; unemployment rate unchanged at 5.8%

ADP® (Automatic Data Processing), for employment in November 2014:

ADP National Employment Report Shows 208,000 Jobs Added in November

Bureau of Labor Statistics, for employment in October 2014:

Payroll employment increases by 214,000 in October; unemployment rate edges down to 5.8%

ADP® (Automatic Data Processing), for employment in October 2014:

ADP National Employment Report Shows 230,000 Jobs Added in October

Bureau of Labor Statistics, for employment in September 2014:

Payroll employment increases by 248,000 in September; unemployment rate declines to 5.9%

ADP® (Automatic Data Processing), for employment in September 2014:

ADP National Employment Report Shows 213,000 Jobs Added in September


[center]Nattering Nabobs of Negativism[/center]

Here’s a grim thought:

Fed economists: America’s missing workers are not coming back

Let’s follow that with another grim thought:

Why wage growth disparity tells the story of America's half-formed economic recovery

By Chico Harlan November 21, 2014
@chicoharlan
[e-mail]

WILMINGTON, Del. — Thomas Gray says he was fortunate coming out of the recession: He took a job in one of the nation’s fastest-growing industries, food services, preparing meals for 500 students in a Head Start cafeteria.

But after two years of work, his salary had not budged, so his mother came out of retirement and took a job at United Way. Four more years have passed, and Gray is skipping bills to manage his expenses. During that time, his salary has risen 58 cents, to $11.70 per hour. But after taking into account the rising price of goods and services — inflation — he has taken a 6 percent pay cut.
....

With unemployment down to 5.8 percent, the country’s half-formed recovery is often described with a convenient shorthand: We have jobs but little wage growth. But stagnancy is just an average, and for many Americans, the years since the financial crisis have pushed them farther from the line, according to a detailed analysis of government labor statistics by The Washington Post.
....

Among the winners in this climate: Older workers, women and those with finance and technology jobs. ... Among the losers: Part-timers, the young, men, and those in the health, retail and food industries.
....

Chico Harlan covers personal economics as part of The Post's financial team.
@chicoharlan
[e-mail]

Dissenters, take note:

A New Reason to Question the Official Unemployment Rate

David Leonhardt
AUG. 26, 2014

The Labor Department’s monthly jobs report has been the subject of some wacky conspiracy theories. None was wackier than the suggestion from Jack Welch, the former General Electric chief executive, that government statisticians were exaggerating job growth during President Obama’s 2012 re-election campaign. Both Republican and Democratic economists dismissed those charges as silly.

But to call the people who compile the jobs report honest, nonpartisan civil servants is not to say that the jobs report is perfect. The report tries to estimate employment in a big country – and to do so quickly, to give policy makers, business executives and everyone else a sense of how the economy is performing. It’s a tough task.

And it has become tougher, because Americans are less willing to respond to surveys than they used to be.

A new academic paper suggests that the unemployment rate appears to have become less accurate over the last two decades, in part because of this rise in nonresponse. In particular, there seems to have been an increase in the number of people who once would have qualified as officially unemployed and today are considered out of the labor force, neither working nor looking for work.

[center]On the Road Again[/center]

The DOL Newsletter - October 6, 2011

DOL Data: There's an App for That
Have an iPhone, iPod Touch or Android phone? Now you can access the latest labor data and news from the department's Bureau of Labor Statistics and Employment and Training Administration in the palm of your hand. The latest free mobile app displays real-time updates to the unemployment rate, Unemployment Insurance initial claims, the Consumer Price Index, payroll employment, average hourly earnings, the Producer Price Index, the Employment Cost Index, productivity, the U.S. Import Price Index and the U.S. Export Price Index in real time, as they are published each week, month or quarter. News releases providing context for the data can also be accessed through the app and viewed within a mobile browser or as PDF documents.

US Labor Department launches economic and employment statistics app

Smartphone users gain mobile access to latest labor data and news

WASHINGTON — The most up-to-date employment data and economic news releases from the U.S. Department of Labor's Bureau of Labor Statistics and its Employment and Training Administration now can be viewed using a new mobile application.
....

The new app is currently available for the iPhone and iPod Touch as well as Android phones. The Labor Department is working to develop versions for BlackBerry and iPad devices. Visit http://m.dol.gov/apps/ to download this and other mobile apps.

Download the Data, Other Mobile Apps


[center]Uh, One More Thing, Sir[/center]

Meet FRED, every wonk’s secret weapon

FRED stands for Federal Reserve Economic Data. It serves as an online clearinghouse for a wealth of numbers: unemployment rates, prices of goods, GDP and CPI, things common and obscure. Today, FRED is more than a little bit famous, thanks to the public’s fascination with economic data.

Federal Reserve Economic Data

So how many jobs must be created every month to have an effect on the unemployment rate? There's an app for that:

Federal Reserve Bank of Atlanta Jobs Calculator™

Index of BLS Economic News Releases

The U.S. Census Bureau has its own releases:

U.S. Census Bureau Latest News

U.S. Census Bureau Economic Indicators

Tomorrow's news before it happens. The schedule for all economic reports:

MarketWatch Economic Calendar

[BumRushDaShow]

1. Thanks for your monthly posting!

Hoping the positive trend continues.

[mahatmakanejeeves]

2. I wouldn't miss this for anything.

Last edited Fri Feb 6, 2015, 12:11 PM - Edit history (1)

Thank you for your thanks.

I made sure to find some negative things in the report. I'm no Pollyanna. There are still people out there hurting.

Please, everyone, enjoy the thread. I'll keep editing as needed.

Best wishes.

[leftynyc]

3. Good news

I saw the "prediction" was for an additional 233K and I'm glad it's higher than what was expected. Thanks for pulling this all together - it makes this stuff much easier to understand to a business illiterate like myself.

[Lucky Luciano]

4. Hey - "prediction" is hard - especially about the future.

- Niels Bohr

[progree]

5. November revised up to 423,000, December revised up to 329,000

Along with January's 257,000 jobs gain, that's a 3-month average of 336,300 jobs gained. Totaling 1.009 million jobs in the last 3 months.

Almost matches Bush's entire 8 year record: 1.3 million more jobs at the end of the Bush presidency than at the beginning.

Of course, the pooh poohers will point to the declining trend: 423,000, 329,000, 257,000). And they will say that of course there were big job gains in November and December, after all that it the Christmas shopping season (folks, these are seasonally adjusted numbers, so they have adjusted for that.)

As for comparisons to the peak in 2007, one must keep in mind that that was an unsustainable artificial bubble economy where collectively people were using their houses as ATMs at the rate of $ hundreds of billions a year.

I'm running a bit behind on my report which features the changes in the statistics over the past month, past 12 months, and from the jobs low point in February 2010. I expect to have it done by noon tomorrow; but will try to do it this evening (please see my sigline --vv

[progree]

6. Job statistics - over the past month, over the past year, and since February 2010

2/7/15 - Great jobs report this month 257,000 net new payroll jobs in January. And November and December were revised upward by a combined 245,000. So we have 502,000 more payroll jobs than we did in last month's report (257+245=502).

The below 3 paragraphs are from http://www.whitehouse.gov/blog/2015/02/06/employment-situation-january :

With today’s strong employment report, we have now seen eleven straight months of job gains above 200,000—the first time that has happened in nearly two decades

The private sector has added 11.8 million jobs over 59 straight months of job growth, extending the longest streak on record.

(Regarding the Labor Force Participation Rate): CEA estimates that of the 3.0 percentage-point decline in the participation rate from 2007:Q4 to January 2015, 1.8 percentage point is due to the natural aging of the population and 0.5 percentage point is due to standard business-cycle effects. The remaining 0.8 percentage point is a “residual” that could reflect either less-well-understood pre-existing trends or lingering after-effects from the unusual severity of the Great Recession. (Components do not sum to total due to rounding.)

Over the past year, payroll jobs has increased by 3,207,000. And since the jobs recovery began in March 2010, payroll jobs has increased by 11,200,000.

The numbers in the below paragraphs come from the Household Survey, which is different from the Establishment Survey that produces the payroll jobs number.

The mixed good and bad news is that both the official unemployment rate and the U-6 unemployment rate -- which counts as unemployed every jobless person who has looked for work sometime, anytime, even just once in the past YEAR, plus part-timers who want a full-time job -- both rose by 0.1% (that's bad). But a big reason for this is that the labor force grew by an eye-popping 1,051,000, while the number of Employed grew by a smaller amount -- 759,000 (both are very good).

The Labor Force Participation Rate increased by 0.2%, while the Employment-to-population ratio increased by 0.1%

Over the past year, full-time workers increased by 3,061,000.

Some key numbers from the Household Survey (note the Household Survey is different from the Establishment Survey that produces the payroll jobs of the first paragraph). See below, and see Table A-1 for the main Household Survey numbers - http://www.bls.gov/news.release/empsit.t01.htm

Exception: the payroll jobs numbers and the inflation-adjusted weekly earnings come from the Establishment Survey. I don't include the over-the-last-month figure for inflation-adjusted weekly earnings, because the CPI data needed for the inflation adjustment is not available until later in the month; but I do include them for the longer periods (over the last year and since the payroll jobs recovery began)


In the below tables, all "%" ones are percentage point changes, not percent increases or decreases. FOR EXAMPLE, when you see something like this:

-1.7% U-6 unemployment rate

It means that the U-6 unemployment rate dropped by 1.7 percentage points (this EXAMPLE is for the one year from November 2013 to November 2014, when U-6 dropped from 13.1% to 11.4%. This is a drop of 13.1 - 11.4 = 1.7 percentage points, *not* a 1.7% decrease. The corresponding percent change is (11.4-13.1)/13.1 X 100% = -12.98%, i.e. a 12.98% decrease. So in summary, IN THIS EXAMPLE, U-6 dropped by 1.7 percentage points, and also decreased by 12.98%.

Over the last month:
+257,000 Payroll Jobs (Establishment Survey, CES0000000001 )
+1,051,000 Labor Force (employed + jobless people who have looked for work sometime in the last 4 weeks)
+759,000 Employed
+291,000 Unemployed (jobless people who have looked for work sometime in the last 4 weeks)
+0.1% Employment-To-Population Ratio aka Employment Rate (it's at 59.2%)
+0.2% LFPR (Labor Force Participation rate) ()
+0.1% Unemployment rate (at 5.7%). Is Unemployed (as defined above) / Labor Force [N864.HM].
+0.1% U-6 unemployment rate (to 11.3%) http://data.bls.gov/timeseries/LNS13327709
+20,000 Part-Time Workers who want Full-Time Jobs (Table A-8's Part-Time For Economic Reasons)
+40,000 Part-Time Workers (Table A-9)
+777,000 Full-Time Workers (Table A-9)

Over the last year (last 12 months):
+3,207,000 Payroll Jobs (Establishment Survey, CES0000000001)
+1,694,000 Labor Force
+2,995,000 Employed (yeah!)
-1,301,000 Unemployed
+0.5% Employment-To-Population Ratio aka Employment Rate (woo hoo!)
-0.1% LFPR (Labor Force Participation rate) (ughh)
-0.9% Unemployment rate
-1.4% U-6 unemployment rate (fabulous. it includes anyone that looked for work even once in the past year)
-464,000 Part-Time Workers who want Full-Time Jobs (Table A-8's Part-Time For Economic Reasons)
-13,000 Part-Time Workers (Table A-9)
+3,061,000 Full-Time Workers (Table A-9)
+2.75% INFLATION ADJUSTED Weekly Earnings of Production and Non-Supervisory Workers ( CES0500000031 )
......... the weekly earnings percentage is 11 months thru December because no CPI data for Jan. yet

The reason there's no data for January yet for the weekly earnings is because the CPI inflation adjustment number for December is not yet available. By the way, this and the payroll jobs numbers are the only numbers in the table above that comes from the Establishment Survey rather than the Household Survey.

All the "over the last year" numbers are really good numbers except the 0.1 percentage point drop in the Labor Force Participation Rate. Interesting though that there was a 0.5% percentage point increase in the Employment To Population Ratio. The Population being talked about is the civilian non-institutional population age 16 and over, yes, including all elderly people, even centenarians.

Seems to me that there is too much discussion in the media of the Labor Force Participation Rate (the employed plus the jobless people who have looked for work in the last 4 weeks, all divided by the population) and not enough attention to what seemingly matters more -- the Employment to Population Ratio. Why aren't we celebrating the increase in the percentage of the population that is employed -- a figure that has been slowly moving up since the job market bottom, despite the growing wave of baby boomer retirements?

Part-Time Workers Who Want Full Time Jobs, as % of All Employed
[div style="display:inline; font-size:1.37em; font-family:monospace; white-space:pre;"]Jan'14 Oct'14 Dec'14 Jan'15
[div style="display:inline; font-size:1.37em; font-family:monospace; white-space:pre;"]5.0% 4.8% 4.6% 4.6%


Since the Payroll Job Recovery Began -- Last 59 months thru Jan 31, 2015: 1'15 - 2'10:
(This is the period from when continuous growth of payroll employment began, thru January 31, 2015)
+11,200,000 Payroll Jobs (Establishment Survey, CES0000000001)
+3,486,000 Labor Force
+9,620,000 Employed (yeah!)
-6,134,000 Unemployed (ditto!)
+0.8% Employment-To-Population Ratio aka Employment Rate (woo hoo!)
-2.0% LFPR (Labor Force Participation rate) (ughh)
-4.1% Unemployment rate
-5.7% U-6 unemployment rate
-2,126,000 Part-Time Workers who want Full-Time Jobs (Table A-8's Part-Time For Economic Reasons)
-81,000 Part-Time Workers (Table A-9)
+9,933,000 Full-Time Workers (Table A-9)
+3.42% INFLATION ADJUSTED Weekly Earnings of Production and Non-Supervisory Workers ( CES0500000031 )
......... the weekly earnings percentage is thru December 2014 because no CPI data for January yet




########################################################################
FFI on the most recent jobs report, straight from the Bureau of Labor Statistics: http://www.bls.gov/news.release/empsit.nr0.htm

Table A-1. Employment status of the civilian population by sex and age (household survey) http://www.bls.gov/news.release/empsit.t01.htm

Several graphs of the key economic stats -- http://www.bls.gov/web/empsit/cps_charts.pdf

The whole enchilada -- including all 16 "A" tables (the household survey) and all 9 "B" tables (the establishment survey) http://www.bls.gov/news.release/pdf/empsit.pdf

BLS Commissioner's Statement on The Employment Situation http://www.bls.gov/news.release/jec.nr0.htm

The Council of Economic Advisors' Take on the Jobs Report http://www.whitehouse.gov/blog/2015/02/06/employment-situation-january (find this at http://www.whitehouse.gov/administration/eop/cea and look for the last "The Employment Situation in" post)

Bureau of Labor Statistics Commissioner's Corner: http://beta.bls.gov/labs/blogs/ Twitter Account: https://twitter.com/BLS_gov

[mahatmakanejeeves]

7. January’s Jobs Report in 10 Charts

January’s Jobs Report in 10 Charts

[mahatmakanejeeves]

8. Job Openings at 14-Year High as Hiring Returns to Pre-Recession Levels

Job Openings at 14-Year High as Hiring Returns to Pre-Recession Levels