The Bureau of Labor Statistics (BLS) released the official employment report this morning. In January 243,000 jobs were created dropping the unemployment rate to 8.3%. Figures for November and December were also revised upwards. This indicates the recovery is continuing. The unemployment rate has dropped almost a per cent since August.
According to the report, all sectors added 257,000 jobs and the public sector lost 14,000 jobs which is almost steady given attrition. For the past 22 months, the private sector has added jobs, but layoffs by state and local governments kept the unemployment rate up. That appears to have leveled off for the time being.
In January, the unemployment rate for both white and black men dropped but the unemployment rate for women, and Hispanics changed little. One reason for this is the gains in manufacturing and construction jobs which go disproportionately to men whereas service sector jobs are weighted more heavily for women.
The encouraging news in the report is that the goods-producing sector (manufacturing) and the construction sector showed growth. Companies that produce durable goods gained 50,000 jobs in January. Steel fabrication, machinery production, and the automobile industry were responsible for the gains. Manufacturing has been shedding jobs for the last decade but this trend has been reversed.
The construction industry added 21,000 jobs. This sector had been hard hit by the Recession losing jobs since 2007. The increase in this sector helps the economy because it is fueled by demand which shows businesses and investors are gaining confidence in the economy.
Mining added 10,000 jobs in January as well. Much of this is in oil and gas production. This industry is adding jobs because domestic oil and gas production has increased under the Obama administration. It is expected to continue growing as natural gas production from fracturing increases across the country.
Even though the holiday shopping season is over, the retail industry has continued to add jobs. Department stores increased employment by 19,000 jobs showing that consumers are beginning to spend again. Auto dealers added 7,000 jobs. The auto industry was nearly dead in 2008, but has been roared back with a vengeance as a result of the loans made by the Obama administration.
Other good news in the report is that the employment figures for November and December were revised upwards from what was released at the time now that full reports are in. The real employment growth in November was 157,000 rather than the 100,000 previously reported. Actual employment for December was 3,000 higher than the 200,000 reported. This news is encouraging because it is the 23rd straight month of employment growth since the stimulus programs took effect.
The economy really needs to add about 300,000 jobs a month to fully recover, but the trend is positive and gaining strength. The Congressional Budget Office (CBO) issued a report earlier in the week which predicted slower GDP growth in the next year. They extrapolated that would increase unemployment. It remains to be seen if that comes to reality.
The mine fields in our path to continued job growth are the economic problems in Europe, increasing oil prices, and election year paralysis. Presently, the jobs trend is up and programs to assist employers to bring their manufacturing jobs back to the U.S. may off set the CBO predictions.
Congress could take steps to insure that the unemployment rate will continue to drop. However, Republicans in Congress do not want to give Obama any wins in an election year, so it is doubtful if they will pas any jobs legislation this year. The President has been taking steps to create jobs without Congress. Hopefully, those will keep the recovery going.
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