Growth of payroll jobs, just 113,000 in January, disappointed some observers but other indicators were strong, including a 6.6 percent unemployment rate, lower involuntary part-time work, and reduced long-term unemployment

1. Economics for your Classroom from
Ed Dolan’s Econ Blog
Forget the Weak Payroll
Numbers. January’s Job Report
was Fundamentally Positive
February 8, 2014
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2. 133,000 Payroll Jobs
 Payroll jobs grew by just 74,000 in
December, the second weak month
in a row. The number disappointed
many observers. However, other
data in the latest report painted a
more optimistic picture
 On the positive side, November job
growth was revised up to from
241,000 to 274,000
 Also, the BLS rebenchmarked its
data for all of 2013 to reflect a more
careful count of payrolls. The
rebenchmarking increased total job
growth for the year by 136,000,
bringing total gains to 2,322,000
February 8, 2014 Ed Dolan’s Econ Blog

3. Unemployment Falls to 5-Year Low of 6.6 Percent
 The US unemployment rate fell to 6.6% in
December 2013, the lowest since October
2008 and down 0.4 percentage points
over the last two months
 The unemployment rate is the ratio of
unemployed persons to the labor force.
The labor force increased by 523,000 for
the month. The number of employed
workers rose by 630,000 and the number
of unemployed decreased by 115,000
 The unemployment rate is based on a
survey of households that includes selfemployed and farm workers. It often
differs from the separate establishment
survey on which payroll jobs data are
based
February 8, 2014 Ed Dolan’s Econ Blog

4. Broad vs. Standard Unemployment Rate
 The BLS also provides a broader
measure of job-market stress, U-6
 The numerator of U-6 includes
 Unemployed persons
 Marginally attached persons who
would like to work but are not
looking because they think there
are no jobs, or for personal reasons
 Part-time workers who would prefer
full-time work but can’t find it
 The denominator includes the labor
force plus the marginally attached
 U-6 fell to 12.7 percent in January, a
low for the recovery
February 8, 2014 Ed Dolan’s Econ Blog

5. Involuntary Part-time Work Falls Sharply
 One component of the broad
unemployment rate consists of
people working part-time “for
economic reasons,” popularly
known as “involuntary part-time”
employment.
 This category includes workers who
would like full-time work but can’t
find it, or whose employers have cut
their hours below full time
 Involuntary part-time work, which
has been elevated throughout the
recession and recovery, fell sharply
in January
February 8, 2014 Ed Dolan’s Econ Blog

6. Long-term Unemployment Falls to Low for Recovery
 The recession and slow recovery have
been characterized by unusually high
levels of long-term unemployment
 The percentage of the unemployed
out of work for 27 weeks fell to 4.7
percent of the labor force, a new low
for the recovery
February 8, 2014 Ed Dolan’s Econ Blog

7. Employment-Population Ratio Moves Up in January
 The civilian employment-population
ratio moved up to 58.8 percent in
January
 This ratio, which remains low by
historical standards, in part reflects a
weak job market and in part the
effects of an aging population
February 8, 2014 Ed Dolan’s Econ Blog

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