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Job Growth Streak Continues In January

U.S. employers continued to add jobs in January for the 88th consecutive month, with an estimated 200,000 new nonfarm jobs added to the workforce, according to the U.S. Bureau of Labor Statistics Employment Situation Report issued February 2 (Exhibit 1).

Co-workers talking about a projecgtThe unemployment rate remained unchanged at just 4.1% for the fourth straight month. That is the lowest unemployment level since December 2000 (Exhibit 2).

Job gains for December 2017 were revised up from 148,000 to 160,000, while the November total was revised down from 252,000 to 216,000.

Average hourly earnings for all employees on private nonfarm payrolls rose by $0.09 to $26.74, following an $0.11 gain in December. Year-over-year, average hourly earnings have risen by $0.75, or 2.9% (Exhibit 3). Exhibit 1

However, the average workweek for all employees on private nonfarm payrolls declined by 0.2 of an hour to 34.3 hours in January (Exhibit 4). In manufacturing, the workweek declined by 0.2 of an hour to 40.6 hours, while overtime remained at 3.5 hours.

Initial jobless claims have remained at an extremely low level, with 230,000 claims filed the week ending January 27, according to the Department of Labor Unemployment Insurance Weekly ClaimsExhibit 2 report (Exhibit 5). The 4-week moving average was 234,500, a decrease of 7,250 from the previous month’s level of 241,750.  The recent jobs claims average has been at the lowest level since 1973.

The advance number for seasonally adjusted insured unemployment during the week ending January 20 was 1,953,000, a slight increase from a month earlier of 1,914,000. The insured unemployment average over the past few months has been in a range lower than at any period since 1973.  This is even more significant considering that the size of the labor force is much larger today than it was 45 years ago. Exhibit
      3

Jobless claims have remained under 300,000 for 152 consecutive weeks – the longest stretch since 1970.

Here are some of the other key trends highlighted in the report: 

  • The number of long-term unemployed (those jobless for 27 weeks or more) dipped slightly from 1.5 million to 1.4 million in January, and accounted for 21.5% of the unemployed (Exhibit 6).
  • The number of persons employed part time for economic reasons inched up from to Exhibit
      44.9 million in December to 5.0 million in January (Exhibit 7).
  • The labor force participation rate remained at 62.7% for the fourth straight month. The employment-population ratio was at 60.1% for the third straight month.
  • The labor force participation rate for those in their prime working years (age 25-54) was at 81.7%, a slight dip from 81.8% in December1 (Exhibit 8). That is about 1.2% below the pre-recession level, and continues to be a weakness in the employment recovery. Exhibit 5

We expect the employment market to continue to expand in the months ahead, based on economic and corporate growth trends. But slow wage growth and the low participation rate for those in their prime working years remain a concern. However, if job growth continues, we could see an improvement in both of those areas in the months ahead.


 

 Exhibit 6Exhibit 7Exhibit 8 
  


  
 



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