It may not have been as ugly as the December payrolls report (which we today learned was actually -227K, far worse than the -140K initially reported), but coming in at just 49K, January’s job gains were less than half the 105K expected. Worse, of that 49K, a whopping 43K was government jobs meaning that just 6K private jobs total were added in January, a tiny fraction of the 163K consensus forecast.
To be sure, the household survey was stronger, with a 539k rise in payroll-concept-adjusted employment in January, while the unemployment rate fell 0.4% to 6.3%, which however reflected a drop in the labor force participation rate (-0.1pp to 61.4%) and the unemployment rate adjusted for misclassification (“employed, not at work, other”) also fell by 0.4pp to 6.9%. The number of workers reporting being on temporary layoff fell by 293k to 2,746k, while the number of permanent job losers decreased by 133k to 3,503k. As a result, the share of unemployed workers reported being on temporary layoff fell to 27.0% vs. 28.4% in December.
And while at the aggregate level the picture is mixed and depends on which survey one looks, at the discrete sector level (which comes from the establishment survey), the perspective was downright ugly with job gains in just 48% of industries and – as noted above – the government accounting for almost all of the headline gains, with 43K of 49K jobs, or 88% of all.
In addition to declines in the virus-affected leisure and hospitality (-61k, after a -536K crash in December) and retail (-38k) sectors, payrolls fell across the healthcare (-41k), transportation (-28k), manufacturing (-10k), and construction (-3k) industries.– READ MORE
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