Haver Analytics
Haver Analytics
| Feb 02 2024

U.S. Payroll Employment Strengthens During January; Wages Firm

  • Job increase exceeds 300,000 for second straight month.
  • Gain in earnings accelerates.
  • Jobless rate is unchanged.

Nonfarm payrolls increased 353,000 (1.9% y/y) in January following a 333,000 December increase and a 182,000 rise in November, revised from 216,000 & 173,000, respectively. Expectations had been for a 175,000 rise in the Action Economics Forecast Survey. The average rise of 289,000 during the last three months is the strongest since March of last year. The monthly gain was the strongest since last January.

Average hourly earnings jumped 0.6% last month after rising an unrevised 0.4% in both December and November. A 0.3% January gain had been expected. The 4.5% y/y earnings increase remains above its 3.0% y/y rise before the pandemic as competition for labor has increased.

The unemployment rate, measured in the household survey, held steady last month at 3.7%, where it’s been for three straight months. It compared to an expected rate of 3.8%. Household employment fell 31,000 after declining 683,000 in December. The labor force fell 175,000 after a 676,000 December decline. The overall unemployment rate, including workers who were marginally attached & working part-time for economic reasons, edged higher to 7.2% from 7.1% in December. The Household Employment figures were revised.

In the establishment survey, private-sector employment strengthened 317,000 (1.8% y/y) after rising 278,000 in December. Factory sector jobs rose 23,000 (0.3% y/y) after an 8,000 increase. Construction sector employment increased 11,000 (2.8% y/y) following a 24,000 December improvement. Mining & logging sector jobs fell 6,000 (+0.8% y/y).

Private service-producing sector employment increased 289,000 in January (1.9% y/y) after improving 245,000 in December. It was the strongest gain in a year. Increases varied greatly amongst service sector categories. Education & health service jobs rose 112,000 (4.2% y/y) while professional & business service jobs rose 74,000 (1.0 y/y). Trade, transportation & utilities employment improved 64,000 (0.7% y/y). Information services employment improved 15,000 (-1.1% y/y) while leisure & hospitality employment rose 11,000 (3.0% y/y). Financial activities employment rose 8,000 (1.1% y/y).

Government sector payrolls rose 36,000 last month (2.7% y/y) after surging 55,000 in December. Local government jobs increased 15,000 (2.2% y/y). State government employment rose 10,000 (4.0% y/y). Federal government payrolls increased 11,000 (3.0% y/y).

Private-sector average hourly earnings rose 0.6% (4.5% y/y) in January, the strongest gain since March 2022. Earnings in the goods-producing sector rose 0.2% (5.2% y/y). Earnings in construction rose 0.6% (5.2% y/y and factory sector earning held steady (5.0% y/y). In the private services-sector, earnings rose 0.6% (4.4% y/y). Private education & health services earnings rose 0.7% (3.7% y/y) while professional & business sector earnings also strengthened 0.7% (4.6% y/y). Leisure & hospitality earnings improved 0.4% and 4.4% y/y and financial activities earnings rose 0.6% (5.3% y/y).

The length of the average workweek tumbled to 34.1 hours in January after falling to 34.3 hours in December. The workweek in the goods-producing sector fell to 39.5 hours from 39.7. The construction sector average workweek declined sharply to 38.6 hours from 39.0 while the factory sector workweek held steady at a reduced 39.9 hours. The average workweek in the private service sector dropped sharply to 33.0 hours from 33.3 and remained below the 33.9 hour high in early-2021. The aggregate weekly hours index, a key indicator of production and income, fell 0.3% m/m in January (+0.3% y/y).

The household survey indicated stability in the jobless rate at 3.7% as the size of the labor force rose. The labor force participation rate held at 62.5% last month. It remained below the high of 63.3% early in 2020. The rate for teenagers declined to 36.5%. For workers aged 20-24, the rate surged to 72.7% from 71.3%. It was the highest rate since the onset of the recent recession. For workers aged 25-54, the rate edged up to 83.3%. For individuals 55 and over, the rate rose to 38.5%.

The employment/population ratio for all workers in January improved m/m to 60.2%, equal to where its level stood twelve months earlier. It is still below its reading of 61.1% in February, 2020 just prior to the pandemic.

The average duration of unemployment fell in January to 20.8 weeks and remained below a 31.9 week high in June of 2021. The median duration of unemployment eased to 9.6 weeks and stood below its 20.3 week high in March 2021. The ranks of those individuals unemployed for 27 weeks or more rose 2.6% m/m but fell 19.0% y/y.

The employment and earnings data are collected from surveys taken each month during the week containing the 12th day of the month. The labor market data are contained in Haver's USECON database. Detailed figures are in the EMPL and LABOR databases. The expectations figures are in the AS1REPNA database.

  • Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio.   Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984.   He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C.   In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists.   Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.

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