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  • Writer's pictureNick Andriacchi

January Employment Summary


As evidence continues to mount that enhanced unemployment benefits, stimulus checks, advanced child tax credit payments etc. kept people from reentering the talent force.


Would it be fair to assume that inflation would be much lower now if people were encouraged to go back to being productive sooner?


With big surprises to the upside for the labor market in general and temporary help specifically, the next few months look very good.

  • 467,000 jobs created, way above analysts expectation & the first full month where the advanced Child Tax Credit payments stopped.

  • A HUGE UPWARD REVISION in the October, November and December employment number (which happens to be the first full month's after the end enhanced UI benefits)

  • The size of the labor force increased for the 4th straight month which caused the unemployment rate to tick up to 4%




Analysis of the January Employment Report


· A more encompassing measure of unemployment (U6) that includes discouraged workers and those holding part-time jobs for economic reasons dropped to 7.1%.

· Prime age labor force participation rate (ages 25-54) was up .1% this month at 82.0%. This number is up .4% since September but is still down by 1.1% since February 2020, the last month before the pandemic started.

· The overall labor force participation is 62.2% after annual adjustment.

· The average workweek for all employees on private nonfarm payrolls was down .2 to 34.7 hours in January. In manufacturing, the average workweek edged down by 0.1 hour to 40.2 hours, and overtime was up by 0.1 hour to 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged up by 0.2 hour to 33.9 hours.

· Average hourly earnings are up 5.7% from the same period a year ago, this reinforces that demand for talent is very strong. Unfortunately, those wages gains were erased by inflation.

· In January, average hourly earnings for all employees on private nonfarm payrolls increased by 23 cents to $31.63. In December, average hourly earnings of private-sector production and nonsupervisory employees rose by 17 cents to $26.92.

· APD reported that 301,000 jobs were lost in January

Source: ADP, BLS, CNBC, ABC News

JOLTS Report FEBRUARY 1, 2022


Job Openings

On the last business day of December, the number of job openings was little changed at 10.9 million.

The job openings rate was unchanged at 6.8 percent. Job openings increased in several industries with the largest increases in accommodation and food services (+133,000), information (+40,000), and nondurable goods manufacturing and state and local government education (+31,000 each). Job openings decreased in finance and insurance (-89,000) and in wholesale trade (-48,000). The number of job openings was little changed in all four regions.

Hires

In December, the number of hires decreased to 6.3 million (-333,000). The hires rate was little changed at 4.2 percent. Hires decreased in professional and business services (-159,000). Hires decreased in the

West region.

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 November, the number of total separations increased to 6.3 million (+382,000). The total separations rate was little changed at 4.2 percent. Total separations increased in accommodation and food services (+130,000) but decreased in federal government (-9,000). Total separations were little changed in all four regions.

In December, the number of total separations decreased to 5.9 million (-305,000). The total separations rate was little changed at 4.0 percent. Among the industries, only federal government had an increase in total separations (+15,000). Total separations decreased in the Northeast and South regions.

The number of quits edged down in December to 4.3 million (-161,000) following a series high in November. The quits rate was little changed at 2.9 percent. Quits decreased in health care and social assistance (-89,000), accommodation and food services (-64,000), and construction (-44,000). Quits increased in nondurable goods manufacturing (+19,000). The number of quits decreased in the South region.

In December, the number and rate of layoffs and discharges were little changed at 1.2 million and 0.8 percent, respectively; both series lows. Layoffs and discharges decreased in retail trade (-67,000) but

increased in federal government (+14,000). The number of layoffs and discharges decreased in the Northeast region.

Net Change in Employment

Large numbers of hires and separations occur every month throughout the business cycle. Net employment change results from the relationship between hires and separations. When the number of hires exceeds the number of separations, employment rises, even if the hires level is steady or declining. Conversely, when the number of hires is less than the number of separations, employment declines, even if the hires level is steady or rising.

Over the 12 months ending in December 2021, hires totaled 75.3 million and separations totaled 68.9 million, yielding a net employment gain of 6.4 million. These totals include workers who may have been hired and separated more than once during the year.

Establishment Size Class

In December, the hires rate decreased in large establishments with 5,000 or more employees. For a more in-depth description of the JOLTS establishment size class estimates, please visit

www.bls.gov/jlt/sizeclassmethodology.htm.


Source: ADP, BLS, Wall Street Journal

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