The Bureau of Labor Statistics (BLS) released its January estimate of new job creation on schedule Friday. According to the report, 157,000 net new jobs were added to the economy in January. The unemployment rate remained unchanged at 7.9%, however, due to more people entering the workforce.
The private sector added 166,000 new jobs but this was off set by 9,000 layoffs by the federal, state, and local governments. There are still 12,000,000 Americans without jobs. On Thursday ADP reported 192,000 new private sector jobs, but it is often a leading indicator.
The economy is still producing private sector jobs despite shenanigans by Congress. More jobs were added than are required to keep pace with population growth, and the number of discouraged workers was down. The BLS indicated that in 2012, 181,000 jobs were added each month. However, Congressional policies are still killing public sector jobs.
In January, job gains occurred in retail trade, construction, health care, and wholesale trade, while new employment was down in transportation and warehousing. A big surprise was the increase in retail trade which rose by 33,000 in January. That compares with the average monthly gain of 20,000 in 2012.
The resurging auto industry is still boosting the economy. In January motor vehicle and parts dealers added 7,000 jobs. Other retail gains were electronics and appliance stores which together added 12,000 jobs. Clothing stores hired 10,000 new workers.
New construction jobs were up by 28,000 last month. The gain was equally split between residential and nonresidential specialty trade contractors. Since reaching a low in January 2011, construction employment has grown by 296,000, with one-third of the gain occurring in the last 4 months.
As good as the construction news is, there is still a long way to go to reach employment levels in that sector before the recession. We are still 2 million jobs short.
Health care added 23,000 jobs in January; however there was a loss of 8,000 jobs in nursing and residential care facilities. Over the year, health care employment increased by 320,000.
Employment increased in wholesale trade up 15,000 jobs. Since the recent low point in May 2010, wholesale trade has added 291,000 jobs. Mining employment also increased 6,000 over the month much of that in natural gas exploration and production. Employment in this industry has risen by 23,000 over the past 3 months largely due to the fracking boom.
Employment was down 14,000 jobs in transportation and warehousing. Couriers and messengers lost 19,000 jobs over the month, following strong seasonal hiring in November and December. Air transportation employment decreased by 5,000 in January.
Manufacturing was essentially unchanged in January and has changed little, on net, since July 2012. Employment in other major industries, including financial activities, professional and businesses services, leisure and hospitality, and government, showed little change over the month.
As has been the case since the beginning of the recession, federal government employment continues to fall in spite of all the political clap trap that government is growing “out of control” under Obama. Local governments are also continuing to lay off workers in droves because of budget cuts.
The federal government cut 5,000 jobs; the postal service was responsible of 600 of those. Local governments cut 6,000 workers. Sadly, 4,700 of those were teachers and school workers. This has been the trend since the Recession. Decimating our educational system will not make for a strong economy down the road.
Congress is shifting costs from the federal government to state and local governments. When federal funding to the states is cut, they in turn shift costs to local governments. It is a total myth that austerity at the federal level saves taxpayers a dime at the end of the day. Congress is just passing costs down the line so they look good to voters. They want to make local officials the bad guys.
President Obama told Congress it must do more to stimulate job growth. The recovery is being held back due to Congressional austerity programs. This means the time it takes for those 12 million to find work is stretched out. That means more suffering for 12 million families.
There is no sign that Congress will pass anything other than austerity which already caused the economy to contract in the 4th quarter.
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