Employment and Unemployment
- The Department of Labor reported an unemployment rate of 5.7 percent for January, an increase of 0.1 percent from December. It reported an increase of 257,000 nonfarm jobs over last month. Employment for November was revised upward from 353,000 to 423,000 jobs created, and December was revised up from 252,000 to 329,000.
- The number of unemployed people in January was 9.0 million, an increase from last month’s figure of 8.7 million.
- More than five years after the recession ended, the unemployment rate remains above the 5.2 to 5.5 percent range that Federal Reserve officials consider the long-run average, according to an article in the Wall Street Journal on October 3, 2014.
- The number of long-term unemployed, those unemployed for 27 weeks or more, was 2.8 million, accounting for 31.5 percent of the unemployed. During the 1980s, when our country faced a similar recessionary period, the proportion of long-term unemployed never exceeded 27 percent.
- The “real” unemployment or U-6 rate is 11.3 percent, up 0.1 percentage point from December. This is the total percentage of unemployed and underemployed workers.
- The “real” number of unemployed Americans is 18.0 million. These are people who are unemployed (9.0 million), want work but have stopped searching for a job (2.2 million), or are working part time because they cannot find full time employment (6.8 million).
- In January, employment grew by 46,000 in retail trade; 39,000 in construction; and 38,000 in health care. Employment in transportation and warehousing fell by 8,600; government (including federal, state, and local) fell by 10,000; and mining decreased by 3,500.
Labor Force Participation
- The labor force participation rate is 62.9 percent, up 0.2 percentage point from last month and near the lowest level in 36 years. Since April 2014, the participation rate has been stuck between a narrow range of 62.7 and 62.9 percent. Prior to the recession, the rate stood at 66 percent.
- If the labor force participation rate were the same as when President Obama took office, the unemployment rate would be 9.7 percent.
- The share of American adults with jobs in December was 59.3 percent, up 0.1 percentage point from last month. This is more than four percentage points below its pre-recession peak.
- Also of concern to economists is the slow growth in wages. Average hourly earnings for all employees on private nonfarm payrolls increased by 12 cents to $24.75. Over the year, average hourly earnings have risen by only 2.2 percent.
- December was the 64th straight month that year-over-year hourly wage growth has been below 2.5 percent. Prior to the recession, wage growth routinely exceeded three percent.