Friday, February 7, 2020

January Employment Data: 225,000 New Jobs, Some Improvements, But AJSN Latent Demand Now 16.25 Million

I read a projection of 164,000 net new nonfarm positions for this morning’s Bureau of Labor Statistics Employment Situation Summary, and thought that might be high.  It wasn’t.

That came in at 225,000.  Along with it the two measures of how common it is for Americans to be working or directly connected to the job market, the employment-population ratio and the labor force participation rate, each gained a substantial 0.2% to reach 61.2% and 63.4%.  Average private nonfarm payroll wages, including an adjustment, jumped 12 cents per hour to $28.44, about double the inflation rate. 

After those results, though, the good news ended.  Seasonally adjusted unemployment edged up from 3.5% to 3.6%, and the unadjusted figure, though mostly showing the difference between Decembers and Januarys, rose 0.6% from 3.4% to 4.0%.  The total number of unemployed, adjusted, gained 100,000 to 5.9 million, and the count of those working part-time for economic reasons, or laboring less than full-time but wanting that, was also up 100,000, reaching 4.2 million.  The total of those unemployed for 27 weeks or longer stayed at 1.2 million.   

The American Job Shortage Number or AJSN, the statistic showing how many more positions could be quickly filled if all knew they would be easy to get, jumped over 1.2 million as follows:

Three-fourths of this difference came from higher official unemployment, followed by 176,000 from those wanting work but not looking for it for the past year, 78,000 from those institutionalized, in the armed services, or off the grid, and 66,000 from people reporting discouragement.  Compared with a year ago, though, the AJSN declined 857,000, with about two-thirds due to lower official joblessness and a 184,000 improvement from those not looking for a year or more.  The share of the AJSN coming from unemployment was 36.0%, three percent higher than in December.

Where are we now?  Overall, there wasn’t much of a change this time.  The good results listed first above, though, should carry the day.  An increase in jobs that much more than the rising population absorbs is nothing to take for granted now, and labor force participation and employment-population results were up more than a nominal amount.  The employment rate increase and the AJSN rise, the latter when taken in monthly context, do not indicate any problems.  Accordingly, the step the turtle took was small, but it was real and it was forward.   

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