Anthony Randazzo commented on the January BLS employment report here – all in all a decent, if not stellar report. Though only 36,000 new jobs were created, the number of long-term (for 26+ weeks) unemployed fell somewhat – from 6.44 to 6.21 million. Meanwhile, the labor force participation rate stands at 64.2 percent, it’s lowest level since the ’80s, as CalculatedRisk notes here.
Looking at the effects of the recession – and the incipient recovery – on the labor market offers an interesting look at what sectors stand poised to drive further improvement. The below graph displays the total percent change in employment, by sector of the economy, since the recession began. I took a similar look at the job market last month, with much the same conclusions.
Construction continues to suffer, with the amount of jobs down 37.25 percent from pre-recession levels and still falling. Government also shed more jobs in January, with total employment in that sector down by about half a percent since 2007.
Meanwhile, the business sector and, surprisingly, manufacturing, give some reason for hope. Employment in professional and business services (the red line on the graph) has steadily increased for months – it’s back up to February 2009 levels. Meanwhile, manufacturing added about 12,000 jobs last month, making January the third straight month of job creation in the sector (note the tiny uptick in the purple line over the last few months). Though still disappointingly low, about 18 percent off its pre-recession peak, manufacturing may prove a bright spot as the year continues.
Some commentators have speculated that unusually harsh winter weather may have curtailed payroll job creation – this is plausible, as the usual seasonal adjustment of the data doesn’t take into account abnormal weather patterns. If this is true, we should expect much of that activity to be pushed into February.