Net Job Creation through January 2014

Friday’s report has been well publicized as disappointing at 113,000 jobs created especially following the December result at 76,000. Less well appreciated is that the January report made revisions to data on payrolls, the workweek and earnings going back to 2009. Revisions to this data, which is drawn from a survey of employers, showed 369,000 more jobs than previously thought were created in the 12 months through March 2013, on a seasonally adjusted basis and in addition November’s data was revised up by 35,000. This was the second upward revision to November which was also revised up in the December report, then by 38,000.

The disappointing December data was blamed on short term influences such as unusually cold weather but strangely, January weather was also miserable in many areas and construction job creation was the highest since 2007. Something doesn’t compute. However based on the data available SMU has performed its regular monthly analysis. January was only the second month in over three years when the creation of “Goods producing” jobs which is mainly construction and manufacturing exceeded “Service providing.” It was also the best performance for goods producing industries since January 2006. Therefore on the face of it the January report was the best result for steel in seven years. Table 1 itemizes some of the sub sectors on manufacturing and construction and also includes numbers for transportation and government. Of concern is that commercial building construction has shed jobs in four of the last five months tending to support the contraction in private non residential construction reported by the Commerce Department in their “Construction Put in Place” data. Since the employment picture turned around in February 2010, the private sector has added 8,499,000 jobs and government has shed 657,000 (Figure 1).