Friday’s jobs report represented a milestone of sorts as both the last report of President Obama’s term and the first report of President Trump’s term. With 227,000 jobs created in January, both leaders had reason to claim success. The official unemployment rate ticked up to 4.8% from 4.7% in December, while the labor force participation rate increased to 62.9% from 62.7%, helping to explain an increased unemployment rate in a month where a substantial number of new jobs were added.
The private services sector led the charge with increases in retail, finance, healthcare and social assistance. Goods-producing industries had a strong month as well, with the construction and manufacturing sectors showing significant gains. After a challenging 2016, mining and logging showed signs of promise.
Average weekly hours held steady at 34.4 while average hourly earnings ticked up to $26.00. In line with recent employment reports, wages are up 2.5% since the same period last year.
Bouncing back from a difficult December, external workforce employment numbers rose by 14,800, an increase of 0.50%. In further positive developments, temporary employment numbers for November and December were revised for a net gain of 4,400 jobs above initial reports. “If the temporary employment growth demonstrated in this month’s jobs report can be sustained through several months,” said Andrew Braswell, CCWP, Senior Research Analyst at Staffing Industry Analysts, “the penetration rate should reach new heights.”
On a final note, I want to touch on a technical aspect of the monthly jobs report. This data comes from two different reports: the Household report, which measures unemployment and participation rates, and the Establishment report, which measures jobs added and lost, and average wages. One anomaly to watch in next month’s report is the civilian non-institutional population, which includes all people 16 and older who are not inmates of institutions nor active duty military. Interestingly, this population actually fell by 660,000 in January, while the number of employed individuals fell by 30,000. Drops in population data could help explain the rising labor force participation rate. Time will tell if this is a one-month fluke or continuing trend.
Overall, February marked a new month and another solid jobs report as the economy continues to drive forward amid the political uproar of a new presidential administration.