Today the Labor Department released their jobs report for the month of January. The highlight of the report is a reduction in the unemployment from 8.5% in December to 8.3% in January. Private sector employment grew by 257,000 jobs, with gains in nearly every industry. The report also showed an increase in average hourly earnings for workings. A detailed numbers breakdown of the report can be seen below.
What is most encouraging about the January report is that it does not stand alone. The unemployment rate has now gone down in five consecutive reports, showing that the job creation is very real over an extended period of time.
The private sector is responsible for almost all of the new job creation, with the public sector lagging badly behind due to cuts in government spending over the last year. A total of 257,000 jobs were created in the private sector including:
- 70,000 new jobs in the sector of professional and business services
- 44,000 new jobs in the sector of leisure and hospitality
- 31,000 new jobs in the sector of health care
- 14,000 new jobs in the sector of wholesale trade
- 19,000 new jobs in the retail sector
- 21,000 new jobs in the construction industry
- 50,000 new jobs in the manufacturing sector
- 10,000 new jobs in the mining sector
The lone negative part of the private sector was the information sector, which saw a loss of 13,000 jobs including a decline of 8,000 jobs in the motion picture and sound recording industry.
Public sector employment “changed little in January” according to the Labor Department. Over the last 12 months public sector employment has decreased by 276,000. Many of these job losses are the result of spending cuts on the federal, state, and local level. The unemployment would undoubtedly be lower if public sector employment merely stayed on the same level. If public sector employment was actually increasing under a program like the New Deal the unemployment rate would likely be significantly lower.
As employment increases worker have more leverage to increase their wages. In January average hourly earnings for nonfarm payrolls increased by 4 cents, or 0.2 percent. Over the last 12 months earnings have increased by 1.9 percent. If earnings continue to rise it could fuel more job growth in the future, as consumer spending is responsible for over two-thirds of the economic activity in America.
Comments