January 2019 Jobs Report: Is There Strength in Numbers?
The number of jobs created in January as revealed in the February 1 Bureau of Labor Statistics’ Employment Situation report could only be characterized as strong. The national economy added 304,000 jobs, approaching double the expectation of about 170,000. Strength in hiring was widespread. Construction, manufacturing, and leisure and hospitality stood out as job gaining sectors, but most other sectors also saw increases. Only wholesale trade, financial activities, and information technology were essentially flat.
The report comes on the heels of a similarly strong report for December, although it did include a downward revision of December’s numbers of 90,000, leaving that month’s job creation number at 220,000, still well beyond what had been expected.
The headline unemployment rate, U3, ticked up 0.1 percentage point to 4 percent. The broader labor underutilization measure, U6, which counts individuals not formally included in the narrow definition of “unemployed” but available for full-time work, jumped from 7.6 to 8.1 percent.
The two sets of numbers – job creation and unemployment rates – are generated in different surveys; the partial government shutdown, for technical reasons, was expected to have an impact on the “household survey,” which produces the unemployment rates. This seems to be the case. Expectations were that headline unemployment would be unchanged, but might tick up a bit due to the shutdown, which, indeed, is what happened.
January’s job creation report, even given the revision to December’s numbers, indicates, at least as measured by the labor markets, that the U.S. economy remains strong and on firm footing.
About the Author
Tom Cunningham holds a Ph.D. in economics from Columbia University and was senior economist with the Federal Reserve Bank of Atlanta from 1985 to 2015. Mr. Cunningham serves as a consultant to MST in the creation and ongoing development of the MST Virtual Economist and is the MST Advisory economics specialist.
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