South By North Strategies, Ltd.

CHAPEL HILL, NC (February 7, 2014) – The national labor market added in January 113,000 more jobs (+0.1 percent) than it lost. After accounting for annual statistical updates, the unemployment rate and the number of unemployed persons in January were essentially unchanged from the prior month.

In January, 10.2 million Americans were unemployed (6.6 percent), while 7.3 million individuals worked part time despite preferring full-time positions. Another 837,000 individuals (not seasonally adjusted) were so discouraged about their job prospects that they had stopped searching for work altogether. Those persons were part of a larger population of 2.6 million Americans who were marginally attached to the labor force.

“January was the 40th-straight month of job growth recorded in the United States,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “In 2013, the national economy netted an average of 194,000 jobs per month. Yet the country is still some eight million jobs short of the number needed to replace the jobs lost since 2007 and to accommodate subsequent population growth.”

In January, the nation’s employers added 113,000 more payroll positions than they cut (+0.1 percent). Gains occurred entirely in the private sector (+142,000), while government employers eliminated 29,000 more positions than they added.

Moreover, the payroll employment numbers for November and December underwent revisions; with the updates, the economy netted 349,000 jobs over those two months, not the 315,000 positions previously reported. Additionally, annual methodological updates revealed that the national economy netted 136,000 more jobs in 2013 than first estimated; the bulk of the gain was due to a definitional change that resulted in the inclusion of a new industry—services for the elderly and persons with disabilities—in the official statistics.

Within the private sector, payroll levels rose the most over the month in the construction industry (+48,000), followed by the professional and business services sector (+36,000, with 56.7 percent of the gain occurring in the professional and technical services subsector) and the leisure and hospitality services sector (+24,000, with 70 percent of gain occurring in the accommodation and food services subsector).

“During 2013, the American economy gained 2.3 million more payroll positions that it lost,” noted Quinterno. “Nevertheless, the average monthly rate of job growth in 2013—some 194,000 positions per month—will not close the nation’s jobs gap anytime soon.”

After accounting for annual statistical updates, labor market conditions as measured by the household survey were relatively unchanged from December. Last month, 10.2 million Americans (6.6 percent of the labor force) were jobless and seeking work. In January, the share of the population participating in the labor force equaled 63 percent.

Compared to a year ago, 1.8 million more Americans were working in January, and 2.1 million fewer persons were unemployed. At the same time, the share of the working-age population with a job (58.8 percent) remained at a low level.

Last month, the unemployment rate was higher among adult male workers than female ones (6.2 percent versus 5.9 percent). Unemployment rates were higher among Black (12.1 percent) and Hispanic workers (8.4 percent) than among white ones (5.7 percent). The unemployment rate among teenagers was 20.7 percent.

Additionally, 5.6 percent of all veterans were unemployed in January, and the rate among recent veterans (served after September 2001) was 7.9 percent. At the same time, 13.3 percent of Americans with disabilities were jobless and seeking work (not seasonally adjusted).

Jobs remained comparatively hard to find in January. Last month, the underemployment rate equaled 12.7 percent, down from the 14.4 percent rate logged a year ago. Not only were 10.2 million Americans unemployed, but 7.3 million individuals worked part-time jobs despite preferring full-time work. Another 837,000 individuals (not seasonally adjusted) were so discouraged about the labor market that they had stopped searching for work.

Among unemployed workers, 35.8 percent had been jobless for at least six months (compared to 37.9 percent a year earlier), and the average spell of unemployment equaled 35.4 weeks, which was unchanged from a year earlier.

In January, the leading cause of unemployment remained a job loss or the completion of a temporary job, which was the reason cited by 52.3 percent of unemployed persons. Another 28.4 percent of unemployed persons were re-entrants to the labor market, while 11.4 percent were new entrants. Voluntary job leavers accounted for the remaining 7.9 percent of the total.

“The January employment report offers yet more evidence of an underperforming labor market,” observed Quinterno. “The bottom line is that the American economy is not generating enough jobs for all those who want and need work. Despite the passage of six years since the onset of the ‘Great Recession,’ the United States’ jobs crisis remains far from over.”