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The Labor Market Report is derived from two monthly surveys from The Bureau of Labor Statistics (BLS) that measure labor market trends: The Current Employment Statistics (CES) survey and The Current Population Survey (CPS).
THE SIGNIFICANCE
What:
The U.S. economy gained 353,000 jobs in January while the labor force and unemployment rate remained unchanged. Job creation far exceeded the Geographic Solutions, Inc. expectations of 255,000 jobs and the WSJ Survey expectations of 185,000 jobs.
Why:
Strong consumer spending has continued to lift the labor market, despite layoff announcements from a handful of prominent companies. The only discouraging sign is that average weekly hours fell to 34.1. Excluding March 2020 when the pandemic began, that is the lowest reading for this indicator since June 2010.
When:
We expect a softening trend to establish itself in the coming months as past Federal Reserve interest rate hikes continue to exert their effects on the economy and household savings dwindle.
THE LANDSCAPE
According to the monthly Bureau of Labor Statistics (BLS) report, employment in the U.S. in January 2024 gained 353,000 additional jobs, while the unemployment rate stayed at 3.7%. It was the largest monthly gain since January 2023. Job additions have accelerated for three consecutive months.
Job creation was strongest in the Private Education & Health Services (+112,000), Professional & Business Services (+74,000), and Trade, Transportation & Utilities (+64,000) sectors, while no major sectors lost jobs.
After posting no net new jobs in December, the Trade, Transportation & Utilities saw one of the largest increases in January.
The labor force participation rate held steady in January after dropping 0.3% to 62.5% in December; the largest one-month decline since January 2021.
The U-6 unemployment rate nudged up to 7.2% in January from 7.1% in December. This is another indication that some part-time workers desire a full-time position.
The U-6 unemployment rate counts discouraged workers who are no longer actively seeking work (and therefore no longer in the labor force) and those that have settled for part-time employment but desire a full-time job.
As mentioned earlier, weekly hours are down but wage increases have grown large enough to improve real income (hours x wages adjusted for inflation) for the employed.