TOPSIDE NOTE: As seen below, this month’s Establishment Survey seasonal conversions wildly overstate the underlying data by about 75,00 – 100,000 jobs.
January’s raw total nonfarm and private-sector job losses are the worst in January since 2009, and represent the worst January on record except for 2008 and 2009.
Predictions, per Yahoo’s Economic Calendar: Briefing.com — 195,000 jobs added, 5% unemployment rate; “Markets expect” 188,000 and 5%.
The AP has been touting 200K job additions.
What I hope ends up being a gag post at Zero Hedge (turns out, not so much — Ed.), which has another post with a range of predictions from 175K-225K, speculates that a goose egg is a possibility.
The report will be here at 8:30.
Benchmarking: January is a month for huge actula (i.e., not seasonally adjusted) job losses every year as seasonal employees are let go. I’ll post tables later, but the benchmarks for this report to be a good one for payroll jobs, regardless of how the results seasonally convert, are as follows:
- Total nonfarm — 2.7 million or fewer jobs lost.
- Private sector — 2.15 or fewer jobs lost.
HERE IT IS (permanent link): It’s far from perfect, that’s for sure. More will be known after digging in —
Total nonfarm payroll employment rose by 151,000 in January, and the unemployment rate was little changed at 4.9 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in several industries, led by retail trade, food services and drinking places, health care, and manufacturing. Employment declined in private educational services, transportation and warehousing, and mining.
Household Survey Data
Both the number of unemployed persons, at 7.8 million, and the unemployment rate, at 4.9 percent, changed little in January. Over the past 12 months, the number of unemployed persons and the unemployment rate were down by 1.1 million and 0.8 percentage point, respectively.
Among the major worker groups, the unemployment rates for adult men (4.5 percent) and Whites (4.3 percent) declined in January. The jobless rates for adult women (4.5 percent), teenagers (16.0 percent), Blacks (8.8 percent), Asians (3.7 percent), and Hispanics (5.9 percent) showed little change over the month.
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, as measured by the household survey, were little changed in January. The labor force participation rate, at 62.7 percent, was little changed. The employment-population ratio (59.6 percent) changed little over the month but was up by 0.3 percentage point since October.
The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed at 6.0 million in January but was down by 796,000 over the year. These individuals, who would have preferred full-time employment, were working part time because their hours had been cut back or because they were unable to find full-time jobs.
Establishment Survey Data
Total nonfarm payroll employment increased by 151,000 in January. Employment rose in several industries, led by retail trade, food services and drinking places, health care, and manufacturing. Private educational services and transportation and warehousing lost jobs. Mining employment continued to decline.
Retail trade added 58,000 jobs in January, following essentially no change in December. Employment rose in general merchandise stores (+15,000), electronics and appliance stores (+9,000), motor vehicle and parts dealers (+8,000), and furniture and home furnishing stores (+7,000). Employment in retail trade has increased by 301,000 over the past 12 months, with motor vehicle and parts dealers and general merchandise stores accounting for nearly half of the gain.
Employment in food services and drinking places rose in January (+47,000). Over the year, the industry has added 384,000 jobs.
Health care continued to add jobs in January (+37,000), with most of the increase occurring in hospitals (+24,000). Health care has added 470,000 jobs over the past 12 months, with about two-fifths of the growth occurring in hospitals.
Manufacturing added 29,000 jobs in January, following little employment change in 2015. Over the month, job gains occurred in food manufacturing (+11,000), fabricated metal products (+7,000), and furniture and related products (+3,000).
Employment in financial activities rose in January (+18,000). Job gains occurred in credit intermediation and related activities (+7,000).
Private educational services lost 39,000 jobs in January due to larger than normal seasonal layoffs.
Employment in transportation and warehousing decreased by 20,000 in January. Most of the loss occurred among couriers and messengers (-14,000), reflecting larger than usual layoffs following strong seasonal hiring in the prior 2 months.
Employment in mining continued to decline in January (-7,000). Since reaching a peak in September 2014, employment in the industry has fallen by 146,000, or 17 percent.
Employment in professional and business services changed little in January (+9,000), after increasing by 60,000 in December. Within the industry, professional and technical services added 25,000 jobs over the month, in line with average monthly gains over the prior 12 months. Employment in temporary help services edged down in January (-25,000), after edging up by the same amount in December.
… The average workweek for all employees on private nonfarm payrolls rose by 0.1 hour to 34.6 hours in January. The manufacturing workweek edged up by 0.1 hour to 40.7 hours, and factory overtime was unchanged at 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 33.8 hours.
In January, average hourly earnings for all employees on private nonfarm payrolls increased by 12 cents to $25.39. Over the year, average hourly earnings have risen by 2.5 percent. In January, average hourly earnings of private-sector production and nonsupervisory employees rose by 6 cents to $21.33.
The change in total nonfarm payroll employment for November was revised from +252,000 to +280,000, and the change for December was revised from +292,000 to +262,000. With these revisions, employment gains in November and December combined were 2,000 lower than previously reported. Over the past 3 months, job gains have averaged 231,000 per month. …
- Total nonfarm — 2.989 million jobs lost vs. -2.7 million or fewer jobs lost benchmark
- Private sector — 2.475 jobs lost vs. -2.15 million or fewer jobs lost benchmark
These are HUGE misses. Each figure represents the highest January job loss since 2009. Each figure is also the highest job January loss on record except for 2008 and 2009.
The seasonal conversions don’t reflect this horrid underlying reality — at all.
I’ll insert the adjusted tables later, but for now just know that this year’s total nonfarm loss is 173,000 greater than last January, while the seasonally adjusted figure of 151,000 is only 70,000 below last January. Comparisons to previous Januarys are mostly similar or even worse. One would have expected a seasonal conversion to only about 50,000 based on these comparisons.
In the private sector, this year’s job loss is 143K greater than last year’s, but the seasonally adjusted result of +158K is only 56K below last year’s 214K. Again, comparisons to previous Januarys are mostly similar or even worse. One would have expected a seasonal conversion to only about 75,000 based on these comparisons.
Here is the BLS data as of after the release:
(Noted at 10:15 a.m. — Ed.) I should also note that raw data not as bad as today’s in 2010 and 2011 led to seasonally adjusted results of 50,000 or below in both total nonfarm and the private sector. Even though they are technically outside of the five-year seasonal adjustment calculation window, they would support an argument that today’s seasonally adjusted results should have come in at zero or below.
More after a review.
UPDATE (references are to seasonally adjusted data unlessotherwise indicated):
- The Household Survey data shows an additional 1.1 million Americans employed in the past two months, compared to 413,000 in the Establishment Survey. I didn’t realize that self-employment had all of sudden become so appealing. (That’s sarcasm.)
- The participation rates are edging up, but I suspect that phenomenon will come to a halt or go the other way in future months.
- Full-time employment went up by over 500K, while part-time employment increased by only 5K.
- “Not in labor force” is still over 94 million.
- The raw data says that a net of 258,000 employees at temp agencies were let go in January. I suspect that this is far more than a Christmas season effect, and has a lot to do with companies getting rid of anything resembling excess cost in advance of a potential slowdown.
UPDATE 2: Zero Hedge notes that retail jobs added of 58K plus food service and drinking places (+47K) account for 70 percent of the seasonally adjusted jobs added in January.