January NFP +113,000

Another tepid jobs report. The economy created 113,000 net new jobs last month, well below the estimate of 181,000. The unemployment rate falls to 6.6%. One good spot is that the labor force participation rate ticked up to 63.0% from 62.8% in December.

Private employers added 142,000 positions to their payrolls in January, while government at all levels shed 29,000. Among individual sectors, manufacturing had a gain of 21,000 jobs, while employment in construction jumped by 48,000.

The employment-population ratio, which has been falling as more workers drop out of the job market, edged up 0.2 percentage points to 58.8 percent. In recent years, the exit of people from the work force has reduced the unemployment rate, but it is a sign that people are giving up hope of finding a job amid slack conditions, hardly the way policy makers would like to see joblessness come down.

Despite Friday’s report, another steady reduction in bond purchases is likely when Fed policy makers next meet in March. A disappointing showing in February’s report, however, might change that.

Wintry conditions that held back hiring were blamed for the weakness in December, a theory popular among more optimistic economists after those numbers came out in early January.

fredgraph02072014

Posted by on February 7th, 2014 at 10:32 am


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