Feb 01, 2013 at 2:34 pm
Payrolls were up by 157,000 and the unemployment rate ticked up to 7.9% in January, according to today’s release from the Bureau of Labor Statistics.
Revisions to the payroll survey added 127,000 jobs to the counts for November (up 247K) and December (196K) such that over the past three months, payrolls were up an average of 200,000 per month, compared with about 150,000 over the three prior months. Revisions for the year 2012 show that the job market added about 335,000 more jobs than in the pre-revised data. Whether this acceleration sticks in coming months bears close watching.
The better jobs performance in the last quarter of 2012 goes against the sharp slowdown in GDP growth as reported earlier this week (down 0.1%). I expect that GDP figure will be revised up in forthcoming reports.
Unemployment remains around 8%, and, in fact, has been in a range from 7.8% to 8.2% since March of last year. Average hourly earnings were up 2.1% over past year, a bit ahead of inflation, so real wages are up a bit. The share of the unemployed who are “long-termers”—jobless for at least half-a-year—has also come down a bit to about 38% in January; it was 43% a year ago.
On the other hand, the weekly earnings of middle- and lower-wage workers (blue collar in manufacturing; non-managers in services) are up only 1.2% over the past year, before accounting for inflation. The difference in wage trends between the average and this less well-off group suggests that higher wage workers may be getting ahead more quickly than middle- and lower-wage workers.
The retail sector added 33,000 jobs and construction was up 28,000 in January and 30,000 in December. Since reaching their low point in early 2011, jobs in construction have bounced back and are up almost 300,000 since then, with 80,000 of those jobs added over the past three months. Some of this may have to do with repairing the damage from hurricane Sandy. In a continuation of a longer-term trend, government employment was down 9,000 driven by losses at the federal and local levels.
In sum, the job market did a bit better than we thought last year, especially towards the end of the year, but the jobless rate remains stuck around 8%. Paychecks are slightly ahead of inflation on average, but not so for workers in lower paid occupations. Revised data show slightly faster job growth than we thought last year, but slower GPD growth and the threat of across the board government spending cuts to the tune of $85 billion starting in March could undermine even the slow progress we’re making.
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