Statement on the Employment Situation in January 2014
Jason Furman, Chairman of the Council of Economic Advisers, issued the following statement today on the employment situation in January. You can view the statement HERE.
Posted by Jason Furman on February 7, 2014 at 09:30 AM EST
Today’s report is another reminder of both the progress that has been made and the challenges that remain. Businesses have now added 8.5 million jobs over the last 47 months and the unemployment rate ticked down to its lowest level in more than five years. But the economy is still healing from the Great Recession and steps are still needed to expand economic opportunity. Given the elevated long-term unemployment rate, extending emergency unemployment benefits for the 1.7 million workers who lost them is critical. At the same time, the President will continue to focus on action, both pushing forward on priorities with Congress and using his pen and his phone to expand opportunity and growth.
FIVE KEY POINTS IN TODAY’S REPORT FROM THE BUREAU OF LABOR STATISTICS
1. The private sector has added 8.5 million jobs in 47 consecutive months of job growth. Today we learned that total nonfarm payroll employment rose by 113,000 in January, due to a 142,000 increase in private employment together with a 29,000 decline in government jobs. Private sector job growth was revised up for November (to 272,000) and December (to 89,000) so that over the past twelve months, private employment has risen by 2.3 million, or an average of 191,000 per month. These figures account for several data revisions released today, including benchmarking the survey-based data to more comprehensive tax records, updating the seasonal adjustment factors, and reclassifying a handful of industries.
2. While the overall unemployment rate continues to fall, it still remains unacceptably high, reflecting more than 3.6 million long-term unemployed. The unemployment rate has fallen 1.3 percentage point in the last 12 months, and fell in January 0.1 percentage point, even as the labor force participation rate rose 0.2 percentage point. But as of January 2013, persons unemployed 27 weeks or more represent 2.3 percent of the labor force, more than double its average prior to the recession. These figures provide a stark reminder that despite the progress that has been made, the after-effects of the recession still linger and are creating hardship for many families. For this reason, the President has called on Congress to reinstate the extended unemployment insurance benefits that expired at the end of 2013, and in the absence of congressional action, the President will use his own authority to forge ahead with efforts to help connect the long-term unemployed with new jobs. Last week,the President announced commitments from over 300 companies – including 80 of the nation’s largest businesses – to adhere to a new set of best practices that will ensure recruiting processes do not disadvantage people who have been out of work, along with new funding for partnerships that connect the long-term unemployed to jobs.
3. Unemployment rates continue to vary widely by educational attainment, from just 3.2 percent for workers (age 25+) who completed college to 9.6 percent for workers without a high school diploma. The economic benefits of going to college are substantial: in January 2014, the unemployment rate for workers who completed college was less than half the unemployment rate for workers with only a high school diploma. Moreover, increased education leads to higher wages and is associated with substantially greater upward mobility. The President continues to press ahead with steps to make college more accessible and affordable, and last month announcedcommitments from more than 150 universities, businesses, and nonprofits to help more low-income students access and succeed in college.
4. In January, the economy typically experiences the sharpest seasonal swing in employment, partly reflecting the unwinding of temporary holiday season retail hiring. During successive Januarys from 2000 to 2013, unadjusted employment fell by an average of 2.8 million, and January 2014 was in line with this pattern, as unadjusted employment again fell by 2.9 million. The Bureau of Labor Statistics uses statistical techniques to adjust the industry-level data for predictable seasonal swings, and reported a seasonally-adjusted increase of 113,000 in total nonfarm payroll employment for January. While seasonal adjustment allows monthly jobs reports to be more easily compared and interpreted, the fact that seasonality varies over time adds an additional margin of error to monthly estimates from the payroll survey.
5. Looking over the last 47 consecutive months of private sector job growth, the construction sector had its strongest single month of job growth in January 2014, adding 48,000 jobs. Part of this strength may reflect a bounce-back from weaker job growth in December, when construction shed 22,000 jobs. In contrast, education and health services saw its weakest month of job growth over the past 47 months, with employment in this sector falling by 6,000 in January. Education and health services employment has risen by an average of 31,000 per month over the last 47 months, but has declined in each of the last two months. Across other sectors, manufacturing had an above-average month, adding 21,000 jobs in January, while the Federal government shed 12,000 jobs, near the lower end of its recent range.
