I didn’t know what to expect with this morning’s jobs numbers – and, looking over the press, most others didn’t either. We’re creeping closer to recession both here and elsewhere in the world, yet is hasn’t happened yet. On the other hand, December’s 262,000 net nonfarm private employment gain, though revised 30,000 downward, was way up there, so we had reason for it to fall. Per Bill James’s Plexiglas Principle, something going up or down an unusual amount for random reasons is likely to go the other way next, so I was also anticipating a drop in the numbers of those in the major marginally attached categories, specifically those not searching for a year or more, which were up sharply in December.
The first happened, but the second did not. There were 151,000 net new nonfarm payroll jobs, seasonally adjusted as that broadcasted number always is, created in January. Adjusted unemployment fell to 4.9% from 5.0%, and average private hourly earnings bounced back from their 1 cent per hour December loss to a 12-cent gain, finishing at $25.39. This measure fluctuates a lot, and over the past year is at 2.5%, hardly huge but nothing shabby with inflation significantly lower. The count of those wanting to work but not having looked for it for a year or more, the group contributing the third largest latent demand for employment, shot up again and is now at 3.5 million, more than 400,000 beyond only two months ago. The Other category rose a surprising 152,000, but the count of those discouraged was off 40,000. Overall, the American Job Shortage Number, or AJSN, gained 874,000 as follows:
The two measures of how common it is for Americans to be working both improved last month, with the labor force participation rate up 0.1% to 62.7% and the employment-population ratio up the same to 59.6%. The counts of those working part-time for economic reasons, or doing that while unsuccessfully seeking full-time opportunities, and those officially unemployed for 27 weeks or longer held at 6.0 million and 2.1 million respectively. Unadjusted joblessness was up, essentially completely from moving from job-rich December to job-poor January, from 4.8% to 5.3%.
Compared with a year before, the AJSN improved significantly once again. In January 2015 it was 1,200,000 higher at 19.56 million, with 1.07 million of that difference from lower unemployment and the rest from the largest categories of marginal attachment, except for those claiming no interest in working. The latter is about the surest bet you can find to increase over the course of a year, and over the past one rose about 1.7 million.
Where does last month’s jobs data fit in? In most ways it was like treading water, but two numbers make the difference. With labor force participation and employment to population both up, I tip the balance to positive. The turtle has taken his first 2016 step forward.