July 19, 2019

U.S. Economy Added 304,000 Jobs in January; Unemployment at 4%

The shutdown does help explain why the unemployment rate ticked up to 4 percent in January. Unlike the monthly hiring figures, which come from a survey of employers and are based on their payrolls, the unemployment rate is based on a survey of households. In that survey, 175,000 more people than in the previous month reported themselves as being unemployed because of a “temporary layoff” — a total that included government workers.

“Where’s your shutdown impact? There it is,” said Brett Ryan, an economist for Deutsche Bank in New York. “It just showed up in the unemployment rate.”

It is possible, of course, that hiring would have been even stronger absent the shutdown.

“It’s a hard counterfactual to figure out,” said Julia Pollak, an economist for the online job site ZipRecruiter.

Economists have become increasingly concerned in recent months about a range of possible threats to the United States economy. Growth has slowed in Europe and China; trade tensions are threatening the American manufacturing sector; stock market jitters could make consumers less likely to spend; and the shutdown, of course, could erode confidence among both consumers and businesses.

None of that, however, has yet affected the job market.

“There’s a caution or concern in people’s voices, but it hasn’t turned into action,” said Teresa Carroll, executive vice president for Kelly Services, a staffing firm. “Anybody in a hiring situation in a company is probably waiting for that next shoe to drop, but it doesn’t mean they’re stopping.”

It isn’t just Friday’s data that looked strong. Claims for unemployment insurance recently hit a nearly 50-year low. Paychecks are growing — data released Thursday showed that wages and salaries rose 3.1 percent in the final three months of 2018 compared to a year earlier, the best mark since the recession ended a decade ago. And employers report in private surveys that they plan to keep on adding workers — at least if they can find them.

Article source: https://www.nytimes.com/2019/02/01/business/economy/jobs-report.html?partner=rss&emc=rss

Speak Your Mind