US job growth like 'Groundhog Day' – all over again(Read article summary)
US economy adds 157,000 jobs in January – tepid growth that the labor market can't seem to break out of. But upward revisions to last year's job numbers suggest the US has regained 61 percent of the employment it lost during the Great Recession.
That's how one spells job growth in the United States today.
In the first key economic report since Congress's fiscal cliff deal, employment in January didn't fall off a cliff. But it didn't set any growth records, either.
Instead, the economy produced 157,000 net new jobs, the Department of Labor reported on Friday. That was slightly below the consensus expectation among economists and well below the 175,600 average that the economy had been producing over the previous 27 months. The unemployment rate ticked up from 7.8 percent in December to 7.9 percent in January.
"This is certainly not the rapid unemployment growth needed to drive down unemployment," writes Heidi Shierholz, an economist at the Washington-based Economic Policy Institute, in an analysis. "It’s like we’re in Bill Murray’s 'Groundhog Day' – each month we wake up to the same report, with all the indicators – employment, unemployment, labor force participation, hours, wages – painting the same picture over and over."
If there was a positive development in the jobs data, it was official revisions to jobs data in previous months, which showed that US employment is further along in recovering from the Great Recession than previous numbers showed. Using the old data, the downturn trimmed 8.78 million jobs from the economy and the economy had regained 54 percent of those jobs by December. Using the revised data, the recession caused slightly fewer losses – 8.74 million jobs – and the US had regained 61 percent of them through December.
The upward revisions on jobs, based on benchmarking that happens every year at this time, were expected. Initial estimates were that it was going to add 386,000 jobs to the March 2012 data, says Keith Hall, a former BLS commissioner and now senior research fellow at the Mercatus Center at George Mason University in Fairfax, Va. The actual revision was 422,000.
Even more important, the last three months of the 2012 saw gains of 150,000 more jobs than previously reported, points out Brian Bethune, president of Alpha Economic Foresights in Wenham, Mass., in a written analysis. That means that estimates of economic growth and income growth are likely to be revised upward in the fourth quarter, he adds, and the economy had more momentum at the end of the year than previously reported.
"The economy is still chugging along at a reasonable growth rate, but it is still not growing at a sufficient pace to reduce the unemployment rate," he writes.