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  • Writer's pictureNick Andriacchi

January 2023 Jobs Summary

The January jobs number blew economists’ estimates out of the water! With all the talk of Big Tech Layoffs and Interest Rate Increases, the 517,000 newly added jobs seem too good to be true.


While I do think the labor market remains strong, this number may be a little overstated due to the following reasons:


· Household survey seasonal adjustment(s) boosted the estimated population size by nearly 1 million and the civilian labor force by 871,000.


· Wage gains continued to slow.


· ADP report that only 106,000 jobs were added in January.


Still, all other indicators point to a very robust labor market.


The Highlights!


Temp Help is up for the first time in several months.


• Nonfarm payrolls increased by 517,000 for the month, way above the economists’ estimate for 197,000.


• Wage growth was below expectations, with average hourly earnings up 4.4% from a year ago, below the 5% estimate.


• The Consumer Price Index (CPI) for December showed a 6.5% rise in prices over last year and a 0.1% decrease over the prior month, government data showed Thursday, on par with consensus estimates compiled by Bloomberg.

Analysis of the January Employment Report


There is a new term that I just heard called “labor hoarding”. This may be contributing to job market resilience because employers are desperate to hold onto staff that they worked so hard to hire over the last year. This is most evident in health, leisure, retail, and construction as layoffs were less than usual in January.


Wage growth continued to slow in February which seems to run counter of the big employment gains. A possible explanation could be that there were higher employment gains in lower wage Industries such as leisure and hospitality that hold down the overall average gains.


As far as those tech layoffs…… most of those layoffs come with big severance packages. They may not be looking for work right away.


• A more encompassing measure of unemployment (U6) that includes discouraged workers and those holding part-time jobs for economic reasons is up to 6.6%.


• Prime age labor force participation rate (ages 25-54) was up .3% to 82.7%. It is still off by .4% from February 2020, the last month before the pandemic started.


• The overall labor force participation remained was up .1% 10 62.4%. This number is disappointing as it still sits .9% below the level of February 2020.


• In January, average hourly earnings for all employees on private nonfarm payrolls rose by 10 cents, or 0.3 percent, to $33.03. Over the past 12 months, average hourly earnings have increased by 4.4 percent. In January, average hourly earnings of private-sector production and nonsupervisory employees rose by 7 cents, or 0.2 percent, to $28.26.


• The average workweek for all employees on private nonfarm payrolls rose by 0.3 hour to 34.7 hours in January. In manufacturing, the average workweek increased by 0.4 hour to 40.5 hours, and overtime increased by 0.1 hour to 3.1 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls increased by 0.2

hour to 34.1 hours.


• APD is reported that 106,000 jobs were added in last month.


Source: ADP, BLS, CNBC, Fox News


https://www.bls.gov/news.release/archives/jolts_02092021.htm

https://www.bls.gov/news.release/empsit.nr0.htm


JOB OPENINGS AND LABOR TURNOVER – DECEMBER 2022


The number of job openings increased to 11.0 million on the last business day of December, the U.S. Bureau of Labor Statistics reported today. Over the month, the number of hires and total separations changed little at 6.2 million and 5.9 million, respectively. Within separations, quits (4.1 million) and layoffs and discharges (1.5 million) changed little. This release includes estimates of the number and rate of job openings, hires, and separations for the total nonfarm sector, by industry, and by establishment size class.

Job Openings


On the last business day of December, the number and rate of job openings increased to 11.0 million and 6.7 percent, respectively. In December, the largest increases in job openings were in accommodation and food services (+409,000), retail trade (+134,000), and construction (+82,000). The number of job

openings decreased in information (-107,000).


Hires


In December, the number and rate of hires changed little at 6.2 million and 4.0 percent, respectively. Hires changed little in all industries.


Separations


Total separations includes quits, layoffs and discharges, and other separations. Quits are generally voluntary separations initiated by the employee. Therefore, the quits rate can serve as a measure of workers’ willingness or ability to leave jobs. Layoffs and discharges are involuntary separations initiated by the employer. Other separations includes separations due to retirement, death, disability, and transfers to other locations of the same firm.


In December, the number of total separations changed little at 5.9 million, and the rate remained unchanged at 3.8 percent. The number of total separations decreased in transportation, warehousing, and utilities (-67,000). (


In December, the number of quits was little changed at 4.1 million, and the rate was unchanged at 2.7 percent. Quits decreased in transportation, warehousing, and utilities (-69,000) but increased in other services (+65,000).


In December, the number and rate of layoffs and discharges changed little at 1.5 million and 1.0 percent, respectively. Layoffs and discharges decreased in finance and insurance (-43,000) but increased in federal government (+4,000).


The number of other separations was little changed in December at 336,000. Other separations increased in retail trade (+29,000) and in health care and social assistance (+19,000). Other separations decreased in state and local government, excluding education (-10,000) and in educational services (-6,000).


Establishment Size Class

In December, the job openings rate increased in establishments with 50 to 249 employees but decreased in establishments with 5,000 or more employees. The total separations rate increased in establishments with 10 to 49 employees but decreased in establishments with 50 to 249 employees and 250 to 999

employees. The quits rate increased in establishments with 10 to 49 employees but decreased in establishments with 50 to 249 employees and 250 to 999 employees. For a more in-depth description of the JOLTS establishment size class estimates, please visit www.bls.gov/jlt/sizeclassmethodology.htm.

____________

The Job Openings and Labor Turnover Survey estimates for January 2023 are scheduled to be

released on Wednesday, March 8, 2023, at 10:00 a.m. (ET).


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