January’s Jobs Report Moved in Only One Direction; AJSN Showed Latent Demand Up ¾ Million

The first month of the year might set the tone for the next 11 – and it will probably set expectations.  What happened this time?

The number of net new nonfarm payroll positions almost doubled the 69,000 estimate I saw at 130,000.  Seasonally adjusted unemployment fell 0.1% to 4.3%, with the unadjusted variety up a seasonally expected 0.5% to 4.6%.  The adjusted count of those unemployed dropped 100,000 to 7.4 million, with the number of long-term jobless, or those out for 27 weeks or longer, off the same amount to 1.8 million.  The two measures of Americans closest to the workforce, the employment-population ratio and the labor force participation rate, each gained 0.1% to 59.8% and 62.5%.  Average nonfarm hourly payroll wages added 15 cents, about the same as inflation, to $37.17.  Maybe best of all, the count of those working part-time for economic reasons, or keeping short-hours jobs while seeking full-time ones, ended its two-month bulge by falling 400,000 to a more normal 4.9 million.

The American Job Shortage Number or AJSN, the measure showing how many additional positions could be quickly absorbed if all knew they were exceptionally readily available, gained 752,000 to reach the following:

With most of the categories of marginal attachment above shrinking, and unemployment seasonally up over 900,000, the share of the AJSN from the latter rose 3.2% to 40.9%.  Compared with a year before, the AJSN was about 400,000 higher, but that was one of the smallest differences since 2024 – the largest contributor was again official joblessness.  In the comparisons between January’s data and that from a month and a year before, another large difference is from those non-civilian and institutionalized, which fell over 800,000 because of the Census Bureau’s newly reduced population estimates.

Just how good was January’s data?  Adding to the above the expected unadjusted 630,000 employment fall, the 143,000-lower number of those not in the labor force, and about 100,000 fewer people not interested, January was a fine month indeed.  There are always possible illusions and unpublicized affecting events, so we will need to see if February’s report reverses these results or continues them.  For now, though, the turtle took a big step forward.