Payrolls Up in January, But Not As Much As Expected

Leading indicators Jan 2016For the first time in eight years the unemployment rate has fallen below below 5 percent, a sign the U.S. economy still has strength even if job growth in January was short of the pace of the last few months.

The U.S. Labor Department’s Bureau of Labor Statistics said employers added 151,000 jobs last month, far less than the 180,000 to 190,000 economists expected. It was also just over half the 279,000 monthly average of the last quarter. Still, it was a far better month for new jobs than a year ago, when severe cold and blizzard conditions in the east kept the increase to a meager 31,000 jobs.

In addition to reporting on January’s employment situation, the BLS also issued its annual revisions. Last year, the economy added 2.524 million jobs, up from the previously reported 2.449 million.

The labor force participation rate inched up to 62.7 percent, an increase over the previous few months, though still at a 40-year low. Among the more highly educated, the participation rate fell to 73.8 percent. It has been declining all year, one factor in the low 2.5 percent unemployment rate for the college educated.

Fewer people in the labor force, combined with a low unemployment rate, is putting pressure on wages. In January hourly pay for employees on private nonfarm payrolls increased by 12 cents to $25.39, an average annual increase of 2.5 percent.

“This is a very encouraging report — the fact that wages rose is very important, the unemployment rate continues to go lower, and job growth at 151,000 is still a good number,” Kathy Bostjancic, an economist at Oxford Economics USA in New York, told Bloomberg Business.

The private sector drove the hiring in January, accounting for 158,000 new, non-farm jobs. Manufacturing showed surprising strength, adding 29,000 jobs. A warm, if in some parts rainy, January helped the construction industry which added 18,000 workers.

Among the other employment drivers in January:

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  • Retail added 57,700 jobs, with department stores adding 13,200 workers and furniture and home furnishing and electronics retailers accounting for a combined 15,900 more jobs.
  • Financial services, including banking and insurance firms, added 18,000 jobs,
  • Healthcare grew by 44,000.
  • Leisure activities, lead by bars and restaurants, added 44,000.

The biggest losers were:

  • Temp help, down by 25,200
  • Transportation and warehousing -20,300.
  • Mining and logging, mostly due to cuts in the oil and gas industry, -7,000
  • Federal and state governments -18,000 combined.
  • Educational services – 38,500.





John Zappe is the editor of and a contributing editor of John was a newspaper reporter and editor until his geek gene lead him to launch his first website in 1994. He developed and managed online newspaper employment sites and sold advertising services to recruiters and employers. Before joining ERE Media in 2006, John was a senior consultant and analyst with Advanced Interactive Media and previously was Vice President of Digital Media for the Los Angeles Newspaper Group.

Besides writing for ERE, John consults with staffing firms and employment agencies, providing content and managing their social media programs. He also works with organizations and businesses to assist with audience development and marketing. In his spare time  he can be found hiking in the California mountains or competing in canine agility and obedience competitions.

You can contact him here.


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