Drat! Employment Takes an Unwelcome Step Back in January

We got a smashing conclusion to 2015 in the last set of jobs numbers, with revised statistics for Q4 of that year that boosted monthly employment figures to within sight of the magic number (300,000 jobs added per month) so beloved of labor economists. The January follow-on is both unexpected and disappointing.

With 151,000 jobs added for January, that tally came in at just over half the December count, as well as just over half the number logged for the three-month average for the final quarter of 2015. Sigh. Unemployment remains unmoved at 4.9 percent. Likewise, the labor force participation rate is little changed, at 62.7 percent, and the employment-population ratio still sits at 59.6 percent.

Growth sectors for January included food services and drinking establishments (+47,000 jobs), healthcare (+37,000), manufacturing (+29,000, after almost no movement for all of 2015), and financial activities (+18,000).

Downward motion struck private educational services (-39,000, owing to seasonal layoffs), transportation and warehousing (-20,000, again because of post-holiday layoffs, particularly for delivery services like FedEx and UPS, who routinely bulk up their workforces for the holiday package season), and mining (-7,000 and down by 146,000 overall since peaking in September 2014). The remaining sectors were more or less static for the month.

While November's numbers were revised up from 252,000 to 280,000 (+28,000), December's numbers were revised downward from 292,000 to 262,000 (-30,000), for a net change of -2,000 jobs. Factoring in these changes, and adding in January, that brings the average down from 280,000 for October through December to 231,000 for November through January.

All I can say is "Ouch!" I'm not looking forward to the impact on stock markets either, after the beating they've already taken in January stemming from weakening growth in China and record-low oil prices.

If there's one ray of sunshine in all of this, it's that it would be hard to go anyplace but up from here. I still believe that IT is positioned for growth in 2016, with unemployment for IT workers under 3 percent, but it's starting to look like that growth may be slower than any of us want or hope it to be. Sigh again.