A surprisingly high 353,000 jobs were added in January, causing the nation’s unemployment rate to hold at 3.7% for the third straight month, according to job data released Friday by the U.S. Bureau of Labor Statistics (BLS).
Many analysts were baffled by the report, since the job growth reported was far higher than the 180,000 expected. They were also at a loss to explain why the numbers so greatly contradicted other key, much gloomier, non-government reports.
“Yeah, I just don’t buy it,” Fox Business’s Cheryl Casone said, reacting to the report on Mornings With Maria Bartiromo. “Full-time jobs, what do we do with that data? I think, at this point, we wait until next month.”
Job creation actually declined sharply, according to private payroll firm ADP, U.S. News reported on Wednesday:
“The decline in jobs added by U.S. employers, from a revised 158,000 in December to a paltry 107,000 in January, was far sharper than economists had predicted.
“The firm’s monthly survey showed 107,000 jobs were added, well below the 145,000 estimate. December’s gain was revised down to 158,000 from 164,000 originally.”
Likewise, Morningstar reported that the consensus forecast showed the increase in nonfarm payroll employment falling to 176,500, from December’s 216,000 increase, and the unemployment rate rising to 3.8%.
A Wall Street Journal survey of economists forecast a gain of 150,000 for January.
“The January jobs report is often hard to decipher because of big changes in the labor market at the start of each year, MarketWatch reported Friday. “Temporary workers hired for the holiday shopping season are let go, for one thing, and many companies announced job cuts at that time”:
“But in recent years these adjustments have led to exaggerated job gains in January, economists say.”
According to Friday’s BLS report, the labor force participation rate of 62.5% was unchanged from December, and the employment-population ratio inched up from 60.1% to 60.2%. These measures showed little or no change over the year.
In 2023, BLS stated job growth by 1,255,000 in its monthly reports, revisions released in Friday’s report show. BLS numbers were later revised downward from those initially reported in 11 of 12 months.
On Friday, the BLS reported that it had previously overstated the employment gain in March of last year by more than a quarter of a million jobs:
“The seasonally adjusted total nonfarm employment level for March 2023 was revised downward by 266,000. On a not seasonally adjusted basis, the total nonfarm employment level for March 2023 was revised downward by 187,000, or -0.1 percent. Not seasonally adjusted, the absolute average benchmark revision over the past 10 years is 0.1 percent.
“The over-the-year change in total nonfarm employment for March 2023 was revised from +4,048,000 to +3,836,000 (seasonally adjusted).”
Thus, while January's employment growth may have exceeded expectations by 175,000, March's 266,000 downward revision erased nearly a hundred thousand more jobs than that number.
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