January jobs report: Unemployment rises to 7.9%, 157K jobs added

posted at 8:36 am on February 1, 2013 by Ed Morrissey

The January jobs report largely met the low expectations of the market today.  The US economy added a net 157,000 jobs, but the unemployment rate went up by a tenth of a point to 7.9%:

Total nonfarm payroll employment increased by 157,000 in January, and the unemployment rate was essentially unchanged at 7.9 percent, the U.S. Bureau of Labor Statistics reported today. Retail trade, construction, health care, and wholesale trade added jobs over the month.

Household Survey Data

The number of unemployed persons, at 12.3 million, was little changed in January. The unemployment rate was 7.9 percent and has been at or near that level since September 2012. (See table A-1.) (See the note and tables B and C for information about annual population adjustments to the household survey estimates.)

Among the major worker groups, the unemployment rates for adult men (7.3 percent), adult women (7.3 percent), teenagers (23.4 percent), whites (7.0 percent), blacks (13.8 percent), and Hispanics (9.7 percent) showed little or no change in January. The jobless rate for Asians was 6.5 percent (not seasonally adjusted), little changed from a year earlier. (See tables A-1, A-2, and A-3.)

In January, the number of long-term unemployed (those jobless for 27 weeks or more) was about unchanged at 4.7 million and accounted for 38.1 percent of the unemployed. (See table A-12.)

The broader U-6 measure of unemployment remained unchanged at 14.4%. That measure, which includes underemployed and discouraged workers left out of the more well-known U-3 unemployment rate, is still above the 14.2% rate of January 2009, when Barack Obama took office. One year ago, it was 15.1%. During the last expansion, it reached a low of 8.0% in 2006 and 2007.

Workforce measures remains steady in January.  The civilian-population percentage ratio was unchanged from December’s 63.6%, one-tenth of a point above the 31-year low set in August 2012.  The same is true for the employment-population ratio, which stayed at 58.6%, just two-tenths below the generational low of 58.4% also set in August 2012.

The addition of 157,000 net jobs isn’t bad news, but it’s not good news either, as those workforce measures show.  Job creation is only keeping pace with population growth.  We will never make a dent in the more than 8 million workers who no longer participate in the workforce at this level of job creation.

Note: Interestingly, the Household Survey only showed an increase of 17,000 jobs in January.

Update: Color CNBC unimpressed:

The new year started off with an old story: Employment grew again in January but not at a pace able to lower the jobless rate.

Nonfarm payrolls rose 157,000 for the first month of 2013 while the unemployment rate edged higher to 7.9 percent, news unlikely to alter the Federal Reserve’s monetary policy or instill confidence that the recovery is gaining steam.

Economists were looking for 160,000 net new jobs created with the unemployment rate holding steady at 7.8 percent.

However, CNBC noted the substantial upward revisions for November and December, too:

November’s numbers rose from the originally reported 161,000 to 247,000, while December was pushed upward to 196,000 from 155,000.

It’s interesting to see that level of job creation combined with a contraction in the economy in Q4.  In part, that’s because the contraction had other issues; real final sales of domestic product rose 1.1% in Q4, which means that a low level of hiring would have been necessary.  I’m wondering if businesses thought the quarter would do better than it actually did.

Update II: Reuters closes the books on 2012, pointing out that the level of job creation has done little to improve the overall employment picture:

Job growth in 2012 averaged 181,000 a month, but not enough to significantly reduce unemployment. Economists say employment gains in excess of 250,000 a month over a sustained period are needed.

Though the unemployment rate dropped from a peak of 10 percent in October 2009, that was mostly because some unemployed Americans gave up the search for work because of weak job prospects.

The share of the working age population with a job has been below 60 percent for almost four years.

And it actually went backwards from that rate in January.


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Let. It. Burn.

tngmv on February 1, 2013 at 12:38 PM

Thank goodness Obama pivoted to job creation 2 years ago, like he told us he would. Why if he had concentrated on global warming or gun control, like all his liberal friends wanted who knows where we’d be. Oh, wait.

Fred 2 on February 1, 2013 at 1:03 PM

Tenwheeler on February 1, 2013 at 12:21 PM

True, I keyed on October for the sake of the low info voters who don’t seem to be able to understand and retain much beyond a couple of weeks. But they still wouldn’t have vote against Obama so you are correct.

Cindy Munford on February 1, 2013 at 1:15 PM

They are claiming a gain of 157,000 jobs in January. That figure is arrived at after a number of “adjustments”; how many are judged to have “dropped out of the labor force” [we have one of the lowest percentages of working age people in the labor force in our history], the “birth/death adjustment” [no data collection is ever 100% accurate, so they guesstimate how many jobs have been created or lost that they are not picking up as hard data. Somehow, every month since 2009, they guess more jobs created than lost], and then there is the classic “seasonal adjustment” [designed to "smooth out the monthly fluctuations in hiring].

So, how big was the “seasonal adjustment” to get the plus 157,000 jobs?

+2.1 MILLION

http://www.zerohedge.com/news/2013-02-01/average-january-nonfarm-payroll-seasonal-adjustment#comments

Consider all the positive “adjustments” they had to make, all inflated, and the best they can do is add 157,000 for the month, and normal population growth [people aging into the workforce minus people aging out of the workforce or working age people dying, plus working age people entering by immigration (legal or illegal)] requires between 200K-300K a month to break even. Somehow, I don’t think it unreasonable to assume that we are being deliberately lied to.

The supposed net gain in jobs is <7.5% of ONE [seasonal] of the inflated adjustments. Given the other adjustments, that is in the best case scenario a rounding error.

Unless, one considers doubting the word of Obama and his prophets to be apostasy.

Subotai Bahadur on February 1, 2013 at 1:38 PM

…more lies!

KOOLAID2 on February 1, 2013 at 1:43 PM

Solid report, just a little below expectations. The increase in the unemployment rate is not necessarily bad, as it means more people are applying for jobs, meaning more job openings … also today we got January numbers for Manufacturing PMI, Consumer Sentiment, and ISM manufacturing – all better than expected. Put it all together and you get the Dow over 14K, just short of an all time high. We still think we’re overdue for a correction here, and it will probably come in the next couple of months when the politicians start their antics, but for now we’ll pop the champagne corks and drink to The Bull like everyone else … and what a ride it’s been, too …

TouchdownBuddha on February 1, 2013 at 4:34 PM

Wow. The news services almost covered the news honestly. Obama must not be up for electon anymore.

KMav on February 1, 2013 at 5:08 PM

TouchdownBuddha on February 1, 2013 at 4:34 PM

Better than expected? Like baseline budgeting what a joke.

Did you know around 170000 people left the work force….no this is not good news….well unless you’re a CBS newsman.

CW on February 1, 2013 at 8:34 PM

For 12 continuous years, Republicans held majority control of Washington, D.C. (they held 2+ out of 3 of the House, Senate, and Presidency). During that time, January 1995 to December 2006, the average level of the Employment-Population Ratio over 144 straight months of Republican majorities was 63.3%, and it never went below 62.0%.

We’ve now had six continuous years of Democrats holding majority control of Washington, D.C., the average Employment-Population Ratio over those six years has been 60.0%, and we haven’t had a month above that average since February 2009.

The average over the four years of Obama’s first term was 58.7%, and we haven’t had a month above that average since August 2009.

Each and every month of the Obama Presidency has “featured” an Employment-Population ratio that was lower than it ever was under President George W. Bush.

The worst month under Bush was better than the best month under Obama.

ITguy on February 1, 2013 at 9:47 PM

There’s massive manipulation going on with these numbers. Especially the “work force” numbers. There’s a good read on this over at Mish’s Global Economic Trend Analysis Blog.

voiceofreason on February 1, 2013 at 10:12 PM

Would it be too much to ask for all those who have dropped out of their job search to at least jump back in for a month and give us a truer view of the unemployment rate? I just want to see how they’d have to spin that… though if they dropped off again the next month that’d make the MSMs day… hmmm.

Ukiah on February 1, 2013 at 10:24 PM

Ed Morrissey said:

Update II: Reuters closes the books on 2012, pointing out that the level of job creation has done little to improve the overall employment picture:

Job growth in 2012 averaged 181,000 a month, but not enough to significantly reduce unemployment. Economists say employment gains in excess of 250,000 a month over a sustained period are needed.

Though the unemployment rate dropped from a peak of 10 percent in October 2009, that was mostly because some unemployed Americans gave up the search for work because of weak job prospects.

The share of the working age population with a job has been below 60 percent for almost four years.

And it actually went backwards from that rate in January.

Ed, they’ve edited that article and sent that text down the memory hole!

If you search for “Job growth in 2012 averaged 181,000 a month”, it’s no longer in the main article and can only be seen in the comments where one commenter quoted the original article:

Tired • 22 hours ago

Job growth in 2012 averaged 181,000 a month, but not enough to significantly reduce unemployment. Economists say employment gains in excess of 250,000 a month over a sustained period are needed

Just needed to highlight this part of it……

Clearly, someone didn’t like Reuters being quoted on this, so in true Orwellian fashion they have edited the article and sent that quote down the memory hole. Now it is replaced with the spin:

Employers added 157,000 jobs last month and 127,000 more jobs were created in November and December than previously reported, the Labor Department said. Revisions performed each January to the prior year’s data showed the labor market was healthier in 2012 than initially thought.

That re-write is a story in itself!

ITguy on February 2, 2013 at 7:14 AM

Ed,
That Reuters story was originally written by Lucia Mutikani, with:

(Additional reporting by Ellen Freilich, Steven C. Johnson, and Leah Schnurr in New York; Editing by Ros Krasny and Andrea Ricci)

Please contact Ros Krasny and Andrea Ricci and ask them about their “Editing”…

ITguy on February 2, 2013 at 7:18 AM

TouchdownBuddha on February 1, 2013 at 4:34 PM

Go to hell propagandist.

Seriously.

tom daschle concerned on February 2, 2013 at 3:06 PM

tom daschle concerned on February 2, 2013 at 3:06 PM

I agree. One more bad report with some extra fake sauce. FOR FOUR FREAKING YEARS.

dogsoldier on February 2, 2013 at 7:13 PM

Employed dropped by 1.446 million people!

Now to be fair this is usual for January to some degree. But make no mistake folks — the layoffs this January were double that of last year, when January was -737,000. The idea that this report is “strong” is just plain crap — or if you prefer, a lie.

Not-in-labor force moved too — the wrong way. 423,000 gave up last month alone.

The benchmark revision also added massively to population, taking it up 313,000 people, which is about double the monthly average. If you want to look at employment including the change in working-age population it’s about 1,750,000 fewer employed, population-adjusted.

This is a serious deterioration

This is the obamaeconomy. The new normal. And it is by choice. You keep electing the truly stupid and evil to office in Washington.

In other words there has been no meaningful change in actual population-adjusted employment whatsoever over the last 12 months.

tom daschle concerned on February 2, 2013 at 10:02 PM

Que. se. queme.

Up in smoke. There was a lot of voter fraud but there was still a large percentage of useful idiots that voted for this little man to continue his agenda of high gas prices, high unemployment, high taxes, a mandatory health tax, and a stagnant economy. It’s like a husband going to his annual review and telling his employer “No, I don’t want a raise, I want complete stagnation in my life for me and my loved ones”. Congrats, America, you are that guy.

Oh by the way, gas used to be under 2 dollars a gallon. Pretty cool, huh?

Rambotito on February 2, 2013 at 11:07 PM

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