January Jobs Report Better Than Usual

January is always an important month for jobs growth as it helps get the market off to a good start after the holiday season.  While the first month of 2020 was not as promising as those in previous years, this January certainly helped to improve the jobs report, which led to broad—if shallow—market gains.  The trend was led by a 225,000 bump in non-farm payrolls, which is well above market estimates. 

Overall, the United States unemployment rate inched 3.6 percent higher with labor force participation improving 0.2 percentage points, to 63.4 percent.  According to data released by the United States Department of Labor, on Friday, this effectively mirrors the highest levels since June of 2013. 

In addition, economists surveyed by Dow Jones had only expected a payroll growth amount of 158,000 with the jobless rate holding at its lowest in more than 50 years, at 3.5 percent. 

Of course, there are other things we need to look at, too.  A better market indicator—one that includes both part-time positions and discouraged workers—also increased, but only 0.2 percent, to 6.9 percent.  This is called the “real unemployment rate” and it previously been its lowest level in the history of data collection on the matter. 

At the same time, employment-to-population ration, according to the household survey, increased to 61.2 percent. Roughly 0.5 percent higher than a year ago, this its highest number since November of 2008.

Looking at a few specific numbers, the construction industry—often riddled by weather issues—led the way in terms of job creation by adding 44,000 new payrolls. This is more than triple the 2019 average of 12,000.  Leisure and hospitality—which are also typically affected by weather—added 36,000, mirrored also by additions to the health care sector.  Professional and business services also grew by 21,000 (increasing its sector bump to 390,000); warehousing and transportation grew by 28,000. 

All that said, manufacturing saw a loss of 12,000 positions, continuing its several-months-long slump, mostly on the loosing of volume in motor vehicles and motor vehicle parts.