the US Employment Situation, January 2015

the best laid plans…

I’d intended to write about the oil industry today, no matter what the results of the monthly Bureau of Labor Statistics monthly Employment Situation report released this morning.  How good/bad could it be?, I thought.  If anything, there might be a negative impact from layoffs in the oilfields.

Turns out, the January 2105 ES is really good, so I’m writing about that instead.  Different varieties of oil stocks on Monday.

large job gains

The economy added 257, 000 jobs in January, +267,000 in the private sector and -10,000 in government.  That’s significantly more than economists had been forecasting, although I’ve come to think that forecasters don’t tend to put their best efforts into coming up with these numbers.  It’s also the latest in a long string of  monthly gains that are way above the +125,000 or so needed to absorb new workers leaving school and entering the workforce for the first time.

very large positive revisions

More important, the revisions to prior months’ job gain estimates are positive   …and enormous.

November 2014 new positions were originally reported as +321,000.  That figure was revised up to +353,000 last month.  The just-released final figure is +423,000.

December 2014 new positions were reported as +252,000.  That has been revised up this month to +329,000.

Add revisions to the January new job total and the economy turns out to be employing a whopping 404,000 more people than we thought a month ago.

unemployment rate up

The unemployment rate rose slightly in January to 5.7%, despite the jobs gains.  That’s because the labor force grew by over a million workers during the month.  This is also good news.  It implies that large numbers of unemployed people who had stopped looking for work–and thus dropped out of the workforce–now think there’s a good chance they can find a position and are back job hunting again.  The return of discouraged workers is another positive sign that had been missing up until now in the rebound from recession.

salary news still mixed

Wages grew by 2.2% over the past year.  December had shown a drop of $.05 an hour in average wages; January recovered that and added another $.07 to $24.75.

So far S&P 500 stock index futures have gained about six points in the pre-market–a tepid, but positive, response.  I think this news deserves better.

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