Economy Watch: January Jobs Numbers Mixed, Mediocre; CBO Reports Shrinking
- Feb 10, 2014
The tepid increase in U.S. jobs in January had economists, who had predicted renewed strength after December’s subpar report, puzzled about the situation. Even so, some segments of the economy created a fair number of jobs last month, according to the Bureau of Labor Statistics.
The construction industry, for instance, saw a surge of hiring, adding 48,000 jobs during January, which more than offset a decline of 22,000 in December. There were job gains in both residential and nonresidential building (up 13,000 and up 8,000, respectively) and in nonresidential specialty trade contractors (up 13,000). Heavy and civil engineering construction added 10,000 jobs.
Also, employment in manufacturing increased by 21,000 in January, which was considerably better than most of 2013, when the sector added only about 7,000 jobs per month. Employment in professional and business services was up in January by 36,000, but that was weaker than the 2013 monthly average of 55,000 jobs, and healthcare employment didn’t move much in January, for the second month in row. During 2013, healthcare created an average of 17,000 jobs a month.
Other sectors of the economy lost jobs. Retailers showed a net of 13,000 workers the door in January, the first drop in three months (the numbers are seasonally adjusted, so that January drop was steeper than merely post-holiday contraction). The federal government, which shed jobs all last year, lost 12,000 positions in January. But most of those weren’t because of the sequester. Instead, the red-ink U.S. Postal Service accounted for 9,000 lost jobs (during the last three months, the USPS lost $354 million, it was reported separately on Friday). Since the worst of the recession at the beginning of 2009, about 766,000 public-sector jobs have been lost, at first mainly at the state and local level, but more recently at the federal level, posing a drag on the overall employment picture.
The BLS also reported on Friday that the number of long-term unemployed (27 weeks or more) continued to drop. In January, the total number of people in that situation was 3.6 million, down by 232,000 for the month, and 1.1 million since January 2013. The long-term unemployed account for 35.8 percent of the total unemployed population.
CBO Reports Shrinking
On Friday, the Congressional Budget Office reported that the federal government ran a budget deficit of $184 billion for the first four months of fiscal year 2014, or $107 billion less than the shortfall during the same period last year. Revenues are up and outlays are down compared with a year ago. If lawmakers enact no further legislation affecting spending or revenues (no sure thing, that), the federal government will end fiscal year 2014 with a deficit of $514 billion, or 3 percent of U.S. GDP, the CBO estimates. That figure compares with a deficit of $680 billion, or 4.1 percent of GDP, in 2013.
The CBO also estimated that the federal government ran a $10 billion deficit in January 2014, compared with a $3 billion surplus during the same month in January 2013. Remarkably, the difference was mainly because Feb. 1 fell on a weekend in 2014, and Jan. 1 is a holiday, so some payments that ordinarily would have been made in February this year were instead made in January, and some payments that would ordinarily be made in January were made in December in both 2012 and 2013. Without those shifts in the timing of payments, the federal government would have realized an $8 billion surplus in January 2014 and a $15 billion deficit in January 2013 — a $23 billion difference.
Wall Street had an upward day on Friday, despite the mediocre employment report, with the Dow Jones Industrial Average gaining 165.55 points, or 1.06 percent. The S&P 500 advanced 1.33 percent and the Nasdaq climbed 1.69 percent.