January Jobs

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David Kotok
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Summary

  • The BLS reported that the economy created 467,000 jobs in the month of January while the unemployment rate remained constant at 4%, as did the participation rate (62.2%).
  • We are still 2,875,000 jobs short of where we were before the pandemic hit.
  • Interestingly, as one indicator of how jobs and the labor market have changed, BLS now reports that 15.4% of the people are teleworking as the result of the pandemic.

Indian white collar male worker in wheelchair having cheerful discussion leading conversation with colleague in creative office workstation beside window

Edwin Tan /E+ via Getty Images

By Robert Eisenbeis

The Bureau of Labor Statistics (BLS) reported that the economy created 467,000 jobs in the month of January while the unemployment rate remained constant at 4%, as did the participation rate (62.2%). This number was about twice the 207,000 predicted by some economists and notably different from the 301,000 job losses predicted by ADP. Most of the job gains were in leisure and hospitality, professional and business services, retail trade, and transportation and warehousing. As the following chart shows, while the economy is creating jobs, there has been a steady decline in the number of new jobs created each month since October 2021, a trend which is consistent with a potential slowdown in real GDP growth. This trend seems contrary to the strong positive reaction of some to nearly half a million jobs being created in January.

CES job gains and losses

The BLS also noted that the unemployment rate remained steady at 4%, as did the reported unemployment rates for the four ethnic groups BLS compiles data for - Whites (3.4%), African Americans (6.9%), Hispanics (4.9%), and Asians (3.6%). But the overall unemployment rate is still above the 3.5% it was prior to the pandemic.

While the economy has been creating jobs, it has still not replaced all the jobs lost due to the pandemic, as illustrated in the next chart. We are still 2,875,000 jobs short of where we were before the pandemic hit.

Cumulative job loss/gain

On the positive side, at least from an employee’s perspective, according to the December JOLTS data, there are now 4,606,000 more job openings than there are unemployed people actively looking for work, as this next chart illustrates.

Number of unemployed versus job vacancies

Complicating this jobs picture, however, are data suggesting that there is a reservoir of 5.7 million people technically not in the labor force who reportedly want a job. The reasons many of these people are not in the labor force at this time likely have to do with the pandemic. For example, some parents, most often women, may be temporarily out of the job market to deal with childcare needs.

Interestingly, as one indicator of how jobs and the labor market have changed, BLS now reports that 15.4% of the people are teleworking as a result of the pandemic. Certainly, this percentage is much higher for us at Cumberland, where most of our employees are working from home, and we have repeatedly postponed full return to the office. Of course, our business is one that permits such flexibility, whereas it would be impossible for a restaurant to enable its employees to telecommute.

Original Post

Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.

This article was written by

David Kotok profile picture
2.06K Followers
David Kotok co-founded Cumberland Advisors in 1973 and has been its Chief Investment Officer since inception. David’s articles and financial market commentaries have appeared in The New York Times, The Wall Street Journal, Barron’s, and other publications. He is a frequent contributor to Bloomberg TV and Bloomberg Radio, Yahoo Finance TV, and other media. He has authored or co-authored four books, including the second edition of From Bear to Bull with ETFs and Adventures in Muniland. He holds a B.S. in economics from The Wharton School of the University of Pennsylvania, an M.S. in organizational dynamics from The School of Arts and Sciences at the University of Pennsylvania, and an M.A. in philosophy from the University of Pennsylvania.David has served as Program Chairman and currently serves as a Director of the Global Interdependence Center (GIC), www.interdependence.org, whose mission is to encourage the expansion of global dialogue and free trade in order to improve cooperation and understanding among nation states, with the goal of reducing international conflicts and improving worldwide living standards. David chaired its Central Banking Series and organized a five-continent dialogue held in Cape Town, Hong Kong, Hanoi, Milan, Paris, Philadelphia, Prague, Rome, Santiago, Shanghai, Singapore, Tallinn, and Zambia (Livingstone). He has received the Global Citizen Award from GIC for his efforts. David is a member of the National Business Economics Issues Council (NBEIC), the National Association for Business Economics (NABE), has served on the Research Advisory Board of BCA Research and is currently on the advisory board of RiskBridge Advisors. He has also served as a Commissioner of the Delaware River Port Authority (DRPA) and on the Treasury Transition Teams for New Jersey Governors Kean and Whitman. Additionally, he has served as a board member of the New Jersey Economic Development Authority and as Chairman of the New Jersey Casino Reinvestment Development Authority.
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