Economy Adds 353,000 Jobs in January

February 2, 2024 – Employment rose by 353,000 in January as the U.S. unemployment rate was unchanged at 3.7 percent, according to the most recent U.S. Bureau of Labor Statistics report. The number of unemployed persons was 6.1 million in January. Job gains occurred in professional and business services, health care, retail trade, and social assistance. Employment declined in the mining, quarrying, and oil and gas extraction industry.

Among the major worker groups, the unemployment rates for adult men (3.6 percent), adult women (3.2 percent), teenagers (10.6 percent), Whites (3.4 percent), Blacks (5.3 percent), Asians (2.9 percent), and Hispanics (5.0 percent) showed little or no change in January. The number of long-term unemployed (those jobless for 27 weeks or more), at 1.3 million, was little changed in January. The long-term unemployed accounted for 20.8 percent of all unemployed people.

In January, the number of people employed part time for economic reasons, at 4.4 million, changed little. 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 people not in the labor force who currently want a job, at 5.8 million, was little changed in January. These individuals were not counted as unemployed because they were not actively looking for work during the four 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 people marginally attached to the labor force changed little at 1.7 million in January. 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 four weeks preceding the survey. The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, increased to 452,000 in January.

“The stronger than expected jobs report shows how the job market continues to be a bright spot within the U.S. economy,” offered Joe Gaffoglio, President of Mutual of America Capital Management. “Fed Chair Jerome Powell recently signaled that interest-rate cuts may not start as soon as the market wanted, and this jobs report hasn’t given him any reason to change that stance.”

“Overall, the labor market remains strong and continues to defy expectations of a softening,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics. “For Fed officials, these data strongly support patience on rate cuts. Policymakers will be in no rush to lower rates if job and wage growth continue to be robust over coming months.”

Where Job Growth Occurred

Professional and business services added 74,000 jobs in January, considerably higher than the average monthly increase of 14,000 jobs in 2023. Over the month, professional, scientific, and technical services added 42,000 jobs. Employment in temporary help services changed little over the month (+4,000) but is down by 408,000 since reaching a peak in March 2022.
In January, employment in healthcare rose by 70,000, with gains in ambulatory healthcare services (+33,000), hospitals (+20,000), and nursing and residential care facilities (+17,000). Job growth in health care averaged 58,000 per month in 2023.

Companies Looking to Hire in the New Year Amid Talent Shortages

Employers anticipate measured hiring in the first quarter of 2024, while persistent talent shortages continue to impede hiring efforts, according to the latest ManpowerGroup Employment Outlook Survey. The research is based on data collected from more than 40,000 employers in 41 countries. The net employment outlook for Q1 is 26 percent, up + three percent year-over-year, but down -four percent from last quarter. “The latest survey reveals that while employer hiring confidence has moderated slightly amid global economic concerns, labor markets remain tight and demand for skilled talent is still strong across multiple sectors,” said Jonas Prising, chairman and CEO of ManpowerGroup. “As companies continue to transform their business models, many are holding onto the talent they have, and struggling to find the new talent they need. This data suggests organizations are committed to offering flexible work options, recognizing that this can give them a competitive edge for attracting and retaining workers. As AI adoption gains traction, employers are turning to upskilling their workforce to maximize potential productivity gains.”

Retail trade employment increased by 45,000 in January but has shown little net growth since early 2023. Over the month, general merchandise retailers added 24,000 jobs, while electronics and appliance retailers lost 3,000 jobs.
Employment in social assistance rose by 30,000 in January, reflecting continued growth in individual and family services (+22,000). Employment in social assistance grew by an average of 23,000 per month in 2023.
Employment in manufacturing edged up in January (+23,000), with job gains in chemical manufacturing (+7,000) and printing and related support activities (+5,000). Manufacturing experienced little net job growth in 2023.
Government employment continued to trend up in January (+36,000), below the average monthly gain of 57,000 in 2023. A job gain occurred in federal government (+11,000), and employment continued to trend up in local government, excluding education (+19,000).
In January, employment in information continued its upward trend (+15,000). Employment in motion picture and sound recording industries increased by 12,000, while employment in telecommunications decreased by 3,000. Overall, employment in the information industry is down by 76,000 since a recent peak in November 2022.
Employment in the mining, quarrying, and oil and gas extraction industry declined by 5,000 in January, following little net change in 2023. Over the month, a job loss in support activities for mining (-7,000) was partially offset by a job gain in oil and gas extraction (+2,000).
Employment showed little change over the month in other major industries, including construction, wholesale trade, transportation and warehousing, financial activities, leisure and hospitality, and other services.

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Executive Editor; Lily Fauver, Senior Editor – Hunt Scanlon Media

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