January NFP = +467,000

The January jobs report is out and the U.S. economy added 467,000 net new jobs last month. The numbers for November and December were also revised much higher. The unemployment rate rose 0.1% to 4.0%.

December, which initially was reported as a gain of 199,000, went up to 510,000. November surged to 647,000 from the previous reported 249,000. For the two months alone, the initial counts were revised up by 709,000. The revisions came as part of the annual adjustments from the BLS that saw sizeable changes for many of the months in 2021.

“The benchmark revisions helped the numbers a bit just because it moved out some of the seasonal factors that have been at work. But overall the job market is strong, particularly in the face of omicron,” said Kathy Jones, chief fixed income strategist at Charles Schwab. “It’s hard to find a weak spot in this report.”

For January, the biggest employment gains came in leisure and hospitality, which saw 151,000 hires, 108,000 of which came from bars and restaurants. Professional and business services contributed 86,000, while retail was up 61,000.

There was more good jobs news: The labor force participation rate rose to 62.2%, a 0.3 percentage point gain. That took the rate, which is closely watched by Fed officials, to its highest level since March 2020 and within 1.2 percentage points of where it was pre-pandemic.

A more encompassing level of unemployment that counts discouraged workers and those holding part-time jobs for economic reasons dropped to 7.1%, 0.2 percentage point decline and to just above its pre-pandemic level.

The job gains brought employment back to about 1.7 million below where it was in February 2020, a month before the pandemic declaration.

The broader U-6 unemployment rate is nearly back to where it was pre-Covid. It’s now at 7.1%. The last pre-Covid low was 6.8% in December 2019.

The Labor Force Participation Rate is down but it’s not quite as dire as some people think. The LFPR for prime working age (25 to 54) is back to 82.0% which is higher than where it was in 2017 and much of 2018.

Posted by on February 4th, 2022 at 9:12 am


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