Keeping you up to date on the latest data releases.
Nonfarm payrolls ticked up just 36,000 in January. Still, even after factoring the upward revisions, January’s payroll gain fell shy of the Bloomberg survey’s median forecast of 150,000. There were a couple of technical factors contributing to the poor estimate. First, annual revisions derived from unemployment insurance tax records (as well as updated birth/death model adjustments and new seasonal factors) knocked down the trajectory of the recovery a little, as the level of nonfarm payrolls in December 2010 was adjusted down by 483,000. Also, severe winter weather in January contributed to a decline in construction employment (down 32,000) and may have affected temporary help services (THS) as well. THS employment fell 11,000 in January, compared to an average gain of 25,000 per month over the last 12 months.
The news wasn’t all bad on the goods-producing side, as manufacturing payrolls rose 49,000 in January, compared to an average monthly gain of 9,000 in 2010. On the service side, payrolls increased just 32,000, following increases in excess of 100,000 over the previous five months. Retail trade employment increased by 27,500 in January and is up just 123,000 since a trough for the series in December 2009.
Perhaps the only constant in this release was the continued, seemingly acyclical growth in healthcare employment, which rose roughly 11,000 in January. The average weekly workweek for all employees on private nonfarm payrolls fell by 0.1 hour to 34.2, though that appears to have been impacted by a near full hour decline in the construction workweek—from 38.1 hours to 37.3 hours. On the other hand, average hourly earnings jumped up 8 cents to $22.86, its largest monthly gain since November 2008. On the household side, annual population control adjustments (still based on the 2000 Census) decreased the civilian population by 347,000, the civilian labor force by 504,000, and employment by 472,000. Importantly, the BLS has not revised the estimates for December 2010 and earlier releases, making the comparison to January’s estimates more noisy than usual. The resulting unemployment rate slipped down by 0.4 percentage point to 9.0 percent. Regardless of the asterisk you may hang on January’s data, the unemployment rate has improved recently, but at 9.0 percent it is still well above its pre-recession level and the employment-to-population ratio improved by 0.1 percentage point in January and December and now sits at 58.4 percent (still 4.3 percentage points below its December 2007 level).