January Jobs Report Misses the Mark, as Employment Slows to Reflect GDP

The Labor Department reported Friday the U.S. economy added 151,000 jobs in January, well below expectations for 190,000 jobs. The unemployment rate ticked down to 4.9% from 5% the month prior, while forecasts called for it to remain unchanged.

The labor force participation rate rose to 62.7% from 62.6%, despite expectations for it to hold steady. The less cited but arguably more important employment-population ratio (59.6%) changed little over the month, but was up by 0.3 percentage point since October.

The number of persons employed part time for economic reasons–sometimes referred  to as involuntary part-time workers–was unchanged at 6.0 million in January. These individuals, who would have preferred  full-time employment, were working part time because their hours had been cut back  or because they were unable to find full-time jobs.

In January, 2.1 million persons were marginally attached to the labor force, which has not changed from a year earlier. These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. However, they are not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey conducted by the Bureau of Labor Statistics.

Among the marginally attached, there were 623,000 discouraged workers in January, or persons not currently looking for work because they believe
no jobs are available for them. That is also  essentially unchanged from a year earlier.

Meanwhile, the December jobs report was revised downward to whow 30,000 fewer jobs in the prior months. But the December report was scarred by weak wage growth, which has stubbornly refused to reflect a labor market tightening. However, wages showed signs of growth in January, rising 2.5% from a year ago.