The U.S. Department of Labor released payroll figures for the month of January today. In January, employers added a total of 157,000 workers to their payrolls. This is roughly in line with the consensus estimate of 160,000 jobs to be added; however, the overall unemployment rate did tick up to 7.9% from the prior month’s reading of 7.8%.
The good news in the numbers released by the Labor Department came in the form of upward revisions in the jobs numbers for the previous two months of November and December. There were 127,000 more jobs created in those months than originally reported.
The figures overall support the view that the U.S. economy’s recovery is on track in a slow and steady fashion. Terry Sheehan, an economic analyst at Stone & McCarthy Research Associates, told Reuters, “This is actually a really good number when you take into account the net upward revision.”
Jack Albin, chief investment officer at BMO Private Bank agreed. He said, “This shows that underneath the surface, the fourth-quarter economy was really pretty good despite all the defense [industry] cuts. I think the private sector is leading the way.” Albin may be correct. All of the job gains in January came from the private sector, where hiring was as broad-based as it was in December. Declines in public sector employment remain moderate.
Job growth for all of 2012 was solid at about 181,000 a month, but more is needed. The share of the working age population with a job has been below 60% for almost 4 years. Economists estimate that employment gains in excess of 250,000 a month over a sustained period are needed to get the unemployment rate below the 6.5% level the Federal Reserve has targeted.
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