The January jobs report released Friday found that only 113,000 jobs were added last month, far short of the 150,000 needed simply to keep up with population growth. However, the ratio of the population in the workforce climbed slightly, and unemployment held steady, according to the Bureau of Labor Statistics.
Anticipating Friday’s report, experts were edgy, after December's report came in well below expectations — the lowest monthly job growth in almost three years. That report was widely attributed to bad weather, and January was equally bad.
If the report “comes in under consensus, the market response will likely be muted as ‘it was weather’ claims attempt to explain away another month of disappointment,” Sterne Agee Chief Economist Lindsey Piegza wrote to clients, as reported by Eric Morath at the Wall Street Journal. “Of course, a print under 100,000 with widespread weakness across sectors will be much more difficult to shrug off,” Piegza added.
Friday's 113,000 report thus edges above Piegza's trouble marker, but only slightly, especially given that expectations were for 185,000, according to the Chicago Tribune.
"Retailers and government agencies cut payrolls by the most in more than a year," the Chicago Tribune reported, "while construction firms and manufacturers boosted employment. Broad-based improvement in job growth is needed to help generate bigger wage gains and spur the consumer spending that accounts for almost 70 percent of the economy."
The dubious jobs report puts new pressure on the Federal Reserve Board, as incoming chair Janet Yellen now must decide whether to continue ratcheting down the stimulants on which the markets have come to rely.
"Ms. Yellen did a masterful job of getting senators to warm to her during her confirmation hearings," The Wall Street Journal noted in its jobs blog Friday morning. "But now she's in the job, the questions could be tougher. If anything, the risk is that the soft data will nudge the generally dovish new Fed chair to emphasize the Fed's willingness to maintain monetary accommodation and that could stir up some of the Fed's more conservative critics on the Hill."
The good news is that the labor force participation rate actually climbed a bit and unemployment held steady. In previous months, declines in the official unemployment rate have been marred by sharp erosion of those working or looking for work, rendering official unemployment a dubious marker.
"The U-6 measure of overall unemployment dropped to 12.7% even with the increase in the labor force, its lowest reading since December 2008 near the apex of the job-loss meltdown in the Great Recession," noted Hot Air's Ed Morrissey, who is reliably skeptical of the Obama economy.
"The number of people employed in the Establishment survey hit its highest level since June 2008, and in the private-sector since March 2008. The workforce participation rate bounced back a little, but not much; 63.0% is still tied for the fifth-lowest month since the 1970s," Morrissey noted.