January Jobs Report: A Tale Of Two Almost Diametrically Opposed Components


  • +304,000 jobs added
  • U3 unemployment rate rose 0.1% from 3.9% to 4.0% 
  • U6 underemployment rate rose 0.5% from 7.6% to 8.1% 

Here are the headlines on wages and the broader measures of underemployment:

Wages and participation rates

  • Not in Labor Force, but Want a Job Now: declined -73,000 from 5.327 million to 5.254 million   
  • Part-time for economic reasons: rose +490,000 from 4.657 million to 5.147 million 
  • Employment/population ratio ages 25-54: rose +0.2% from 79.7% to 79.9% 
  • Average Hourly Earnings for Production and Nonsupervisory Personnel: rose $.03 from  $23.09 to $23.12, up +3.4% YoY.  (Note: you may be reading different information about wages elsewhere. They are citing average wages for all private workers. I use wages for nonsupervisory personnel, to come closer to the situation for ordinary workers.) 

Is a recession close?

The more leading numbers in the report tell us about where the economy is likely to be a few months from now. These were mixed, with at very least a decelerating bias.

  • the average manufacturing workweek fell -0.1 hours from 40.9 hours to 40.8 hours. This is one of the 10 components of the LEI.
  • Manufacturing jobs rose by +13,000. YoY manufacturing is up +261,000.
  • construction jobs rose by +52,000. YoY construction jobs are up +338,000.  
  • temporary jobs rose by +1000. YoY these are up +146,000.
  • the number of people unemployed for 5 weeks or less rose by +199,000 from 2,126,000 to 2,325,000. The post-recession low was set eight months ago at 2,034,000.

Holding Trump accountable on manufacturing and mining jobs

 Trump specifically campaigned on bringing back manufacturing and mining jobs.  Is he keeping this promise?  

  • Manufacturing jobs rose an average of +22,000/month in the past year vs. the last seven years of Obama's presidency in which an average of +10,300 manufacturing jobs were added each month.   
  • Coal mining jobs fell -100 for an average of +150/month vs. the last seven years of Obama's presidency in which an average of -300 jobs were lost each month
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