NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws. |
January Nonfarm Payrolls: 151,000
Expectation: 185,000
What drove the numbers: The increases came in retail trade, food services and drinking places, health care,
and manufacturing. Retail trade has increased 301,000 the past 12 months, with nearly half the rise in motor vehicle and parts deal and general merchandise stores. The retail trade sector essentially posted no growth in December.
Manufacturing saw an increase of 20,000 jobs after posting little or no change over the past 12 months. Several sectors reported declines for January, with some of those larger than normal seasonal layoffs.
Transportation and warehousing jobs decreased by 20,000 in January, wth most of the loss (-14,000) among couriers and messengers, reflecting larger than usual layoffs following strong seasonal hiring in the prior 2 months.
Mining (where energy is accounted for) lost another 7,000 jobs, bringing their losses since the Sept. 2014 peak to 146,000 or 17%.
Unemployment: 4.9%
Expectations: 4.9%
The labor force participation rate edged up to 62.7%, up 0.4 percentage points since November, but still under
the 62.9% mark from Jan. 2015.
The number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged in January, at 2.1 million, and has shown little movement since June. These individuals accounted for 26.9 percent of the unemployed.
After accounting for the annual adjustments to the population controls, the civilian labor force and total employment were little changed in January. The employment-population ratio (59.6%) changed little over the month but was up by 0.3 percentage point since October.
Average wages increased 12 cents for January and have now risen 2.5% over the course of the past 12 months. The average workweek rose 0.1 hour to 34.6 hours.
Other highlights:
Revisions included a decrease to 262,000 (292,000 previously) for December and November was revised up to 280,000 (252,000 prior) for a net decline of 2,000 over the two months. Over the past 3 months, job gains have averaged 231,000 per month.
The benchmark was also revised -- total jobs level for March 2015 – the new benchmark the Bureau of Labor Statistics (BLS) will work off of when doing all the seasonal adjustments and such, was revised down by 206,000.
Comments: The report was well below expectations for 185,000 jobs to have been created in January. Markets have been bouncing around in response, with stock futures heading lower and the yield on the 10-year US Treasury note rising. But few are signaling this presents a definite impact for the Fed. While some are noting that the below-expectations result in September likely prompted a pause for the Fed, few are really altering their rate-hike expectations. We still expect at most two rate increases from the Fed over the course of 2016. The mention in several areas of greater than expected seasonal job losses also perhaps takes some of the “sting” out of the data. It appears this report could offer a little something to everyone and it seems that current market sentiment may be driving the response to the data more than anything.
“
