January’s jobs report was a mixed bag. A gain of 157,000 jobs is a decent figure, while unemployment ticked up to 7.9 percent. But the November and December figures were substantially revised, revealing a much more positive situation than first reported. As we do every month, let’s break down the Bureau of Labor Statistics report’s main findings, in six charts.
Unemployment and jobs gained
The January figure of 157,000 jobs gained was right on forecasters' estimates, and the slight uptick in unemployment to 7.9 percent wasn't too notable. But the real action was in the revisions, which revealed that we gained 247,000 jobs in November and 196,000 in December, a huge upward change:
However, the public sector continued to take a beating, losing 9,000 jobs last month, just as it did in November. December's loss was 6,000 jobs. With Washington obsessed with budget cutting, and the sequester looming, don't expect this situation to improve anytime soon:
Labor force participation
Perhaps the least malleable important economic data point is the labor force participation rate, which for the third straight month clocked in at 63.6 percent, which is still very far below its pre-recession level due to many people dropping out of the workforce:
As we explain every month, the BLS releases six unemployment measures. There’s U3, the number that shows up in all the news articles, which counts people who don’t have jobs but have looked for one in the past four weeks. But there are also U1, U2, U4, U5 and U6. U1 and U2 numbers are usually lower than U3, and they measure the percentage of people who have been unemployed for 15 weeks or longer and the percentage who have lost jobs or done temporary work during the month being measured, respectively.
The figures for U4, U5 and U6 are usually higher than for U3. Each of these categories includes everyone in all the lower categories: All people in U3 are in U4; all people in U4 are in U5; and all people in U5 are in U6. U4 adds people who have stopped looking for work because they’ve concluded that none is available. U5 adds people who would like to work but for whatever reason have not looked for work recently. U6 adds the underemployed, or part-time workers who want to be working full-time but cannot for whatever reason.
While U-3, the headline number, ticked up, as did U-2, U-1, U-4, and U-5 all fell, while U-6 stayed constant:
Job sectors were hit to varying degrees by the downturn. Construction took the heaviest hit, while health and education were barely hurt at all. This past month, trade and transportation made the biggest gains, while only government lost jobs:
Last but not least, year-over-year wage growth is now above the crucial 2 percent line, meaning that wages are growing ever-so-slightly faster than inflation. But we still have a long way to go to make up for years of subpar wage increases: