Another Look at January's Jobs Numbers
On the surface, the January jobs numbers appear to be "not bad." There were 151,000 jobs created, and the official unemployment rate dropped below 5%.
But the story inside the numbers is really, really awful. The Bureau of Labor Statistics calculates job creation and loss using two different measurements: the Current Population Survey and "Establishment" data from the Current Employment Statistics. Usually, the two measurements are roughly the same.
But how do you explain this, BLS?
Consider these BLS numbers based on household data. In January, there were 25,328,000 "foreign born" workers employed, a one-month drop of 98,000.
In January, there were 123,710,000 "native born" men and women employed, a one-month drop of 567,000.
Analysts note that there are several ways to count jobs created and lost but the losses shown among men and women, foreign born and immigrants, is significant, said a congressional expert, who told Secrets, "Maybe big thing this month is just the decline in number of native born workers drops over half million in a month?"
That means that the actual number of jobs created was about 650,000. What kind of jobs were they? Zero Hedge blog refers to the "Waiter and Bartender Recovery" – an apt way to describe the fact that 70% of those jobs are minimum-wage positions.
MarketWatch thinks the numbers are "fishy":
By virtually all accounts, U.S. manufacturers are struggling to grow amid a decline in exports and a big drop in demand among energy producers. Yet the industry supposedly added 29,000 new jobs in January to mark the biggest gain in 14 months.
Believable? Many economists are skeptical. And even if the job increases are real, some predict hiring will slow again next month. After all, manufacturers only added 33,000 jobs all of 2015.
Businesses and professional firms that employ white-collar workers added only 9,000 jobs last month, the smallest gain in more than two years.
Quite a comedown for a segment of the economy that has led the way in job creation during the recovery. These jobs increased by an average of 52,000 a month in 2015.
The poor performance can be blamed on a sharp decline in temp jobs after the end of the holiday season — they fell 25,000 last month. But it was still a surprisingly weak number that will raise eyebrows if it persists.
Retailers didn’t add as many workers as expected for the holiday season. No surprise. Sales at most traditional retailers such as Macy’s M, -1.18% have been surprisingly soft as consumers save up or seek better deals online.
So how to explain a whopping 58,000 gain in January that led all industries? That was the biggest gain in almost four years. Even more surprising, department stores added the most new jobs in the retail sector: 15,000. The last time they hired that many people was at the end of 2013.
Every so often a monthly employment report is full of so many irregularities that it pays to discount the report. This might be one of those times.
We've commented several times over the years about the BLS cooking the books on jobs. James Pethokoukis lists some other stats that tell far more of the real story about the employment picture than the bare-bones numbers highlighted by the media:
Not everything was great: job gains far short of 185,000 expectations (though averaging 231,000 the past three months), U-6 unemployment-underemployment rate unchanged at 9.9%, long-term unemployment worsened, labor force participation and employment rate still way below pre-recession levels, wages gains short of what you would expect to see in a full-throttle economy. Particularly vexing for Barclays was job weakness in the service sector.
In other words, the job situation in America still sucks, and the president is blowing smoke by touting the numbers as good news.