US Strong Wage and Job Gains in January with Private Payrolls Adding 444k New Jobs

US in January added 467k non-farm payrolls jobs, more than forecasted 150k. December previous 199K revised to +510K. Wages increased more than expected and the jobless rate rose to 4.0% from 3.9%. US Average Hourly Earnings (M/M) rose 0.7%. Change in private payrolls +444K Change in manufacturing payrolls -6K

Working

December 2021 U.S. Employment Report

The Covid-19 virus again threatens the global economy again.  Is this Deja vu? As the world’s economy was shut down and much of America had stay at home orders the threat of Omicron is causing a nervous reminder of those dark days. Jobless claims numbers have been improving but unfortunately the story is much worse as people have not all been able to return to work with jobs replaced or been left devastated from lost income.

The market had expected the January report released Friday to show nonfarm payrolls rise 150k new jobs which it beat with 467k new jobs.  The volatile numbers point up how difficult estimating the jobs situation is amid an economy struggling to get back to normal following the coronavirus-inducted shutdown. The national unemployment rate had come off a 50 year low 3.5% with higher participation before the Covid-19 lockdown now to 4.0%.

US Jobs Report

January 2022 US Employment Report & Expectations

Employment:

  • Non-Farm Payrolls Jan: 467K (est 150K; prev 199K; prevR 249K)
  • Unemployment Rate Jan 4.0% (est 3.9%; prev 3.9%)
  • Labor Force Participation Rate Jan: 62.2% vs 61.9% prior (was 62.8% pre-pandemic)
  • Underemployment rate % vs 7.4% estimate. Last month 7.3%. Prepandemic 7.0%
  • Two-month net revision +700K
  • Change In Manufacturing Payrolls Jan: -6K (est 25K; prev 26K; prevR 35K)
  • Change In Private Payrolls Jan: 444K (est 150K; prev 211K; prevR 270K)
  • Change in Government Payrolls Jan: K (prev -12K)
  • U6 underemployment rate 7.1% vs 7.3% prior
  • Long-term unemployed at 1.70m vs 2.0m prior (vs 1.2m pre-pandemic)
  • The employment-population ratio 59.7% vs 59.5% prior (61.1% before pandemic)
  • US Avg. Hourly Earnings (M/M) Jan: 0.76% (est 0.5%; prev 0.6%; prevR 0.4%)
  • Avg. Hourly Earnings (Y/Y) Jan: 54.7% (est 5.2%; prev 4.7%; 5.1%)
  • Average weekly hours Jan: 34.87 vs 34.7 expected and prior

The unemployment rate and number of unemployed persons prior to the coronavirus (COVID-19) pandemic was 3.5 percent and 5.7 million, respectively, in February 2020)

Where the Jobs Were:

  • Leisure and hospitality (151K)
  • Professional and business services (86K)
  • Retail (61K)
  • Transportation and warehousing (54K)
  • Local Government (29K))

Where jobs were lost:

  • The biggest job losses occurred in Manufacturing (-6K)

Job growth averaged 537K per month in 2021. Nonfarm employment has increased by 18.8 million since April 2020 but is still down by 3.6 million, or 2.3 percent, from its pre-pandemic level in February 2020.

Labour shortages continue to weigh even after federal government-funded unemployment benefits have expired and schools reopened. Some investors believe such shortages could get worse due to the White House’s vaccine mandate.

United States Non Farm Payrolls

Private Jobs

The US private sector added just 211 thousand in December of 2021, the smallest gain since January and well below forecasts of 365 thousand.

United States Nonfarm Payrolls - Private

Government Jobs

Government Payrolls in the United States fell by fell by 12 thousand in December of 2021, the smallest drop since September.

 

United States Government Payrolls


 Manufacturing Jobs

Manufacturing Payrolls in the United States rose by 26 thousand in December of 2021, following an upwardly revised 35 thousand increases in the previous month and missing market expectations of 35 thousand. A job gain in machinery (+8,000) reflected the return of workers from a strike. Manufacturing employment is down by 219,000 since February 2020.

United States Manufacturing Payrolls

 

 Wages

US Avg. Hourly Earnings (M/M) Dec: 0.6% (est 0.4%; prev 0.3%; prevR 0.4%)

  • Average hourly earnings for all employees on US private nonfarm payrolls increased by 19 cents, or 0.6% over the month to $31.31 in December of 2021, above market expectations of 0.4% and following an upwardly revised 0.4% rise in November.
  • In December, the average hourly earnings of private-sector production and nonsupervisory employees rose by 18 cents to $26.61.
  • Over the past 12 months, average hourly earnings have increased by 4.7%, after an upwardly revised 5.1% in November, well above market estimates of 4.2%.
United States Average Hourly Earnings MoM

Avg. Hourly Earnings (Y/Y) Dec: 4.7% (est 4.2%; prev 4.8%; 5.1%)

  • Average Hourly Earnings YoY in the United States decreased to 4.70 percent in December from 5.10 percent in November of 2021
United States Average Hourly Earnings YoY

 Hours

Avg Weekly Hours Nov: 34.8 (est 34.7; prev 34.7)

  • The average workweek for all employees on private nonfarm payrolls was unchanged at 34.7 hours in December of 2021, below market estimates of 34.8.
  • In manufacturing, the average workweek edged down by 0.1 hour to 40.3 hours, and overtime edged down by 0.1 hour to 3.2 hours.
  • The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged up by 0.1 hour to 34.2 hours.
United States Average Weekly Hours

 


  Household Survey Data

The unemployment rate declined by 0.3 percentage point to 3.9 percent in December, and the number
of unemployed persons decreased by 483,000 to 6.3 million. Over the year, these measures are down
by 2.8 percentage points and 4.5 million, respectively. In February 2020, prior to the coronavirus
(COVID-19) pandemic, the unemployment rate was 3.5 percent, and unemployed persons numbered 5.7
million.

Among the major worker groups, the unemployment rates for adult men (3.6 percent), adult women
(3.6 percent), and Whites (3.2 percent) declined in December. The jobless rates for teenagers (10.9
percent), Blacks (7.1 percent), Asians (3.8 percent), and Hispanics (4.9 percent) showed little or no
change over the month.

Among the unemployed, the number of permanent job losers, at 1.7 million in December, declined by
202,000 over the month and is down by 1.8 million over the year. The number of persons on temporary
layoff was little changed at 812,000 in December but is down by 2.3 million over the year. The number
of permanent job losers in December is 408,000 higher than in February 2020, while the number on
temporary layoff has essentially returned to its February 2020 level.

The number of long-term unemployed (those jobless for 27 weeks or more) declined by 185,000 to 2.0
million in December. This measure is down from 4.0 million a year earlier but is 887,000 higher than in
February 2020. The long-term unemployed accounted for 31.7 percent of the total unemployed in
December.

The labor force participation rate was unchanged at 61.9 percent in December but remains 1.5
percentage points lower than in February 2020. The employment-population ratio increased by 0.2
percentage point to 59.5 percent in December but is 1.7 percentage points below its February 2020 level.
Over the year, these measures have increased by 0.4 percentage point and 2.1 percentage points,
respectively.

The number of persons employed part time for economic reasons, at 3.9 million in December,
decreased by 337,000 over the month. The over-the-year decline of 2.2 million brings this measure to
461,000 below its February 2020 level. These individuals, who would have preferred full-time
employment, were working part time because their hours had been reduced or they were unable to find
full-time jobs.

The number of persons not in the labor force who currently want a job was little changed at 5.7
million in December. This measure decreased by 1.6 million over the year but is 717,000 higher than in
February 2020. These individuals were not counted as unemployed because they were not actively
looking for work during the 4 weeks preceding the survey or were unavailable to take a job.

Among those not in the labor force who wanted a job, the number of persons marginally attached to
the labor force was essentially unchanged at 1.6 million in December. These individuals wanted and
were available for work and had looked for a job sometime in the prior 12 months but had not looked for
work in the 4 weeks preceding the survey. The number of discouraged workers, a subset of the
marginally attached who believed that no jobs were available for them, was also essentially unchanged
over the month, at 463,000.

Household Survey Supplemental Data

In December, the share of employed persons who teleworked because of the coronavirus pandemic
was 11.1 percent, little different from November. These data refer to employed persons who teleworked
or worked at home for pay at some point in the 4 weeks preceding the survey specifically because of the
pandemic.

In December, 3.1 million persons reported that they had been unable to work because their employer
closed or lost business due to the pandemic—that is, they did not work at all or worked fewer hours at
some point in the 4 weeks preceding the survey due to the pandemic. This measure was down from the
level of 3.6 million in November. Among those who reported in December that they were unable to
work because of pandemic-related closures or lost business, 15.9 percent received at least some pay
from their employer for the hours not worked, little changed from the prior month.

Among those not in the labor force in December, 1.1 million persons were prevented from looking for
work due to the pandemic, little changed from November. (To be counted as unemployed, by
definition, individuals must be either actively looking for work or on temporary layoff.)

These supplemental data come from questions added to the household survey beginning in May 2020 to
help gauge the effects of the pandemic on the labor market. The data are not seasonally adjusted. Tables
with estimates from the supplemental questions for all months are available online at
www.bls.gov/cps/effects-of-the-coronavirus-covid-19-pandemic.htm


Establishment Survey Data


Total nonfarm payroll employment rose by 199,000 in December. Job growth averaged 537,000 per
month in 2021. Nonfarm employment has increased by 18.8 million since April 2020 but is down by 3.6
million, or 2.3 percent, from its pre-pandemic level in February 2020. In December, employment
continued to trend up in leisure and hospitality, in professional and business services, in manufacturing,
in construction, and in transportation and warehousing. (See table B-1. See the box note on page 5 for
more information about how the establishment survey and its measures were affected by the coronavirus
pandemic.)

Employment in leisure and hospitality continued to trend up in December (+53,000). Leisure and
hospitality has added 2.6 million jobs in 2021, but employment in the industry is down by 1.2 million, or
7.2 percent, since February 2020. Employment in food services and drinking places rose by 43,000 in
December but is down by 653,000 since February 2020.

Employment in professional and business services continued its upward trend in December (+43,000).
Over the month, job gains occurred in computer systems design and related services (+10,000), in
architectural and engineering services (+9,000), and in scientific research and development services

Manufacturing added 26,000 jobs in December, primarily in durable goods industries. A job gain in
machinery (+8,000) reflected the return of workers from a strike. Manufacturing employment is down
by 219,000 since February 2020.

Construction employment rose by 22,000 in December, following monthly gains averaging 38,000 over
the prior 3 months. In December, job gains occurred in nonresidential specialty trade contractors
(+13,000) and in heavy and civil engineering construction (+10,000). Construction employment is
88,000 below its February 2020 level.

Employment in transportation and warehousing increased by 19,000 in December. Job gains occurred
in support activities for transportation (+7,000), in air transportation (+6,000), and in warehousing and
storage (+5,000). Employment in couriers and messengers was essentially unchanged. Since February
2020, employment in transportation and warehousing is up by 218,000, reflecting job growth in couriers
and messengers (+202,000) and in warehousing and storage (+181,000).

Employment in wholesale trade increased by 14,000 in December but is 129,000 lower than in
February 2020.
Mining employment rose by 7,000 in December. Employment in the industry is down by 81,000 from a
peak in January 2019.

In December, average hourly earnings for all employees on private nonfarm payrolls increased by 19
cents to $31.31. Over the past 12 months, average hourly earnings have increased by 4.7 percent. In
December, average hourly earnings of private-sector production and nonsupervisory employees rose
by 18 cents to $26.61. (See tables B-3 and B-8.)

The average workweek for all employees on private nonfarm payrolls was unchanged at 34.7 hours in
December. In manufacturing, the average workweek edged down by 0.1 hour to 40.3 hours, and
overtime edged down by 0.1 hour to 3.2 hours. The average workweek for production and
nonsupervisory employees on private nonfarm payrolls edged up by 0.1 hour to 34.2 hours. (See tables
B-2 and B-7.)

The change in total nonfarm payroll employment for October was revised up by 102,000, from +546,000
to +648,000, and the change for November was revised up by 39,000, from +210,000 to +249,000. With
these revisions, employment in October and November combined is 141,000 higher than previously
reported. (Monthly revisions result from additional reports received from businesses and government
agencies since the last published estimates and from the recalculation of seasonal factors.)

The Employment Situation for January is scheduled to be released on Friday, February 4, 2022, at
8:30 a.m. (ET).


November 2021 ADP U.S. Employment Report

Private payroll company ADP reported that US jobs grew 534,000 in November. The US Labor Department will report It’s jobs report on Friday. October added downwardly revised 570K increase with market expectations Adding 525K.

United States ADP Employment Change

Read More: ADP Reports US Added 534K Jobs In November With Service Sector Adding 424K


Jobless Claims for the week ending Nov 26th 2021

Initial jobless claims continue to fall. Americans filing for unemployment benefits fell to the lowest level of initial claims since November 15, 1969. The labor market continues to recover from the coronavirus economic burdens. Initial claims by 71,000 to 199,000 in the week ended November 20th. Demand for workers remains strong as the economy rebounds.

United States Initial Jobless Claims

Read More: US Initial Jobless Claims Hit Lowest Since 1969


Challenger, Gray & Christmas Jobs Report November 2021

US Job Cuts Fall To Lowest Since May 1993

US companies Job cuts fell 34.8 percent from a month earlier in November 2021 and 77 percent from a year earlier to 14,875. This was the lowest since May 1993. Companies are battling to keep workers amid a tight labor market.  The technology sector had the most job cuts with 1980.

Read More: US Job Cuts Fall To Lowest Since May 1993  

  

 

Source: AFP, Challenger, DOL, TradersCommunity Data, BLS

From The TraderCommunity Research Desk

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