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Last Update: 01-Feb-13 09:16 ET
Employment Situation Unchanged Even As Payroll Growth Misses Expectations
Nonfarm payrolls increased by 157,000 in January after increasing an upwardly revised 196,000 (from 155,000) in December. The Briefing.com consensus expected nonfarm payrolls to increase 180,000. The annual revisions for all of 2012 were included in the January report. Those revisions showed that there were 335,000 more nonfarm payroll jobs for all of 2012 than originally reported. Even though payroll growth came in below expectations, it was roughly in-line with employment trends from the last year. On average, payrolls increased 181,000 per month from January to December 2012. The January 2013 miss was within tolerances of the average trend. Furthermore, even though November (+86,000) and December (+41,000) were revised significantly higher, the payroll data in January suggests that firms did not hire as many new workers as the DOL expected in its seasonal adjustment calculations for the initial claims level. If the sudden decline in initial claims in the beginning of January was the result of less holiday workers being laid off, payrolls should have increased at a much higher rate in January. Private nonfarm payrolls increased by 166,000 jobs in January. That was down from a 202,000 gain in December and below expectations of a 193,000 gain. Like overall payrolls, the level of private nonfarm payroll growth is in-line with the 2012 trend (187,000). Aggregate wages rose 0.3% as the average workweek remained at 34.4 hours and average hourly earnings increased 0.2%. That gain is not enough to support 2.0% consumption growth without consumers dipping into savings. The unemployment rate increased from 7.8% in December to 7.9% in January. The consensus expected the unemployment rate to fall to 7.7%. The BLS uses new population controls every January, so the size of the labor force cannot be compared with the December 2012 data. Thus, the reason for the increase in unemployment cannot be determined.
