Despite Shutdown, Jobs Went Up In January

Gladys Abbott
February 3, 2019

Healthcare added 41,600 jobs in January, down from the 50,200 jobs the industry added the month prior, according to the latest jobs report from the U.S. Bureau of Labor Statistics. Employment in the leisure and hospitality sector jumped by 74,000.

Private economists had expected an increase of about 170,000 jobs and the unemployment rate to be unchangedat 3.9 percent. The unemployment rate rose from 3.9% to 4% due to federal employees who were furloughed by the government shutdown being counted as unemployed.

Last month was overblown: Figures for the two prior months were revised down to show 70,000 fewer jobs created than the total 490,000 initially estimated for November and December. The unemployment rate rose in January (up from 3.9 percent in December), and that's largely because of the shutdown.

Growth of 100,000 jobs per month is required in the USA to keep pace with growth in the working-age population. This suggests that the measured number of unemployed will fall in February, lowering the unemployment rate below 4%. Last week's applications for unemployment benefits came in at 253,000, above from the 49-year low hit earlier in the month but still low by historical standards.

"This jobs report is showing no evidence of an economy slowing, certainly not falling into recession", Michelle Meyer, chief United States economist for Bank of America Merrill Lynch, told the New York Times.

Numerous remaining furloughed federal employees were classified as "employed but absent from work", so those employees were not counted in the unemployment rate.

The report is a key piece of data in gauging the direction of the U.S. Economy.

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How did the shutdown affect jobs?

Notable gains occurred in the retail sector (21,000), transportation and warehousing (27,000), and education and health services (55,000). Some 426,000 were discouraged workers, who weren't looking for work because they believed no jobs are available for them, based on the BLS survey. "Don't be surprised if we see something less robust".

NOGUCHI: You're right. The longer term trend is what matters.

North said the rate is almost a ideal number, "not too hot" so as to spark fears of inflation, but "not too cold" to raise concerns about wage stagnation.

The gain of 304,000 jobs in January almost doubled consensus (165,000), but significant revisions to the January data seem likely.

MARTIN: All right. NPR's Yuki Noguchi for us this morning with those new jobs numbers.

But the shutdown was also a driver of the rise in the unemployment rate, since the separate survey of households used to determine the joblessness counted furloughed workers as well as contractors as unemployed.

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