Join        Login             Stock Quote

Private Payrolls Rise A Modest 166K In January

 February 01, 2013 10:16 AM

Private payrolls expanded by a less-than-expected 166,000 in January on a seasonally adjusted basis, the Labor Department reports. Last month's level of jobs creation represents a considerable slowdown from December's upwardly revised 202,000 rise. The annual pace of growth has also slipped, with a 1.9% gain in private payrolls for last month vs. the year-earlier level. For comparison, private payrolls gained 2.0% on the year through December. Overall, today's employment report reminds that the labor market continues to expand slowly. The trend isn't impressive, at least not relative to what's needed to boost the economy to a substantially higher level of growth. But today's jobs report is still far from fatal as it relates to assessing the business cycle.

[Related -Automating Ourselves To Unemployment]

As always, the question is whether the sluggish growth rate for payrolls can persist? The annual trend through January has clearly decelerated, but only marginally. The current 1.9% increase looks modest next to the recent highs of 2.5% from a year ago. But a 1.9% year-over-year growth rate for private payrolls—if we can keep it—is hardly the end of the world. Indeed, a 2% annual pace, give or take, was the upper range for a period before the Great Recession hit. That was also a time when worries about labor shortages were openly discussed. Same rate of increase, different macro context.

[Related -Fed: Waiting For June… Or Godot?]

In any case, no one will confuse a 1.9% pace of jobs growth as sufficient in 2013. But it's a stretch to say that the labor market's capacity for expanding has fallen off a cliff. The danger sign at this point would be a consistently falling pace of growth. The January rate of increase for private payrolls looks a bit wobbly on that front—the 1.9% annual rise is the slowest since June 2011. If in, say, March or April we're at 1.5%, it'll be time to worry. But not yet. For now, we're talking a marginally lesser rate, and one that's still quite respectable in the grand scheme of history and so it's premature to argue that we've reached a turning point for the worse.

While we're looking in the rearview mirror, let's recognize too that the Labor Department's annual benchmark revision tells us that jobs growth in the final months of 2012 was stronger than originally reported. "The U.S. labor market has been very resilient in recent months," Harm Bandholz, chief US economist at UniCredit Group, tells Bloomberg. "The big story is all the upward revisions to the previous months, which gives the report a real positive spin. All these concerns that the fiscal uncertainty deterred businesses from hiring, they certainly haven't materialized."


Post Comment -- Login is required to post message
Alert for new comments:
Your email:
Your Website:

rss feed

Latest Stories

article imageAutomating Ourselves To Unemployment

In this current era of central planning, malincentives abound. We raced to frack as fast we could for the read on...

article imageFed: Waiting For June… Or Godot?

The Federal Reserve left interest rates unchanged yesterday, as widely expected. But the possibility of a read on...

article imageThe Single Best Place To Invest Your Money For Retirement

It was never supposed to be this daunting. At least that's what we were read on...

article imageNegative Blowback From Negative Interest Rates

The Federal Reserve is widely expected to leave interest rates unchanged today. But perhaps standing pat read on...

Popular Articles

Daily Sector Scan
Partner Center

Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.