For Immediate Release


Michelle Bazie

Statement: Chad Stone, Chief Economist, on the January Employment Report

WASHINGTON - Today's jobs report is another in the recent string of such monthly
reports showing modest job creation.  The unemployment rate dropped
surprisingly to 9 percent, but it remains very high. While labor
market conditions are brighter than two years ago when the economy was
hemorrhaging jobs, the job market remains in a deep slump
for people who want to work but can't find jobs.  It would not be helped
by the drag on both the economy and job creation from House
Republican efforts to cut domestic spending immediately.

Due to
depressed labor force participation and high unemployment, the
percentage of people aged 16 and older with a job stands at 58.4 percent
- 4.3 percentage points lower than the 62.7 percent at the
start of the recession in December 2007 (see chart).  If this
employment-to-population ratio were the same 62.7 percent it
was in late 2007, over 10 million more people would be working.

economy is growing, but not fast enough to quickly close the large gap
between what the economy is capable of producing at full employment and
what it is actually producing.  The Congressional Budget
Office (CBO) projects that, under its assumption of economic growth
averaging about 3.4 percent a year (it was 3.2 percent in
the fourth quarter of 2010), it will take until 2016 for the
unemployment rate to fall to 5.3 percent.  Even that slow return
to higher employment will require job growth averaging 200,000 a month.

Federal Reserve has policies in place that would support economic
activity and job growth in line with CBO's forecast, and we may begin to
see stronger job growth in coming months.  On the fiscal
policy side, the tax-cut and unemployment insurance deal that President
Obama and Congress enacted at the end of 2010 is also giving the
recovery a boost.

House Republicans, however, would move in the
opposite direction, slamming on the brakes by immediately cutting
federal discretionary spending.  An immediate spending cut would be
the wrong way to go when the economy still needs a boost.

About the January Jobs Report

month's report includes revisions to the previous two years of payroll
employment data that result in modest reductions in the level of private
and total nonfarm payroll employment from those previously reported
as well as changes in the pattern of monthly job change.  In addition,
the household survey results for January reflect updated population
estimates.  Because the updating of population estimates makes the
January data non-comparable with earlier data, the report also
includes selected earlier data adjusted for the new population

  • Private and government payrolls, which
    may have been held down by severe winter weather in some areas, rose by
    just 36,000 jobs in January.  Private employers on net added
    50,000 jobs, while local government employment fell by 10,000 jobs
    (state government employment and federal employment each fell by
  • This is the 11th straight month, of
    private-sector job creation, with payrolls growing by 1.1 million jobs
    (a pace of 101,000 jobs a month) since February 2010; total nonfarm
    employment (private plus government jobs) has grown by 827,000 jobs
    over the same period, or 75,000 a month.  Job creation of 100,000 to
    125,000 a month is necessary just to keep up with population growth and
    keep the unemployment rate from rising; growth of 200,000 to 300,000
    jobs a month or more is typical in strong economic recoveries.
  • In
    January, there were 7.7 million fewer jobs on nonfarm payrolls than
    there were when the recession began in December 2007, and 7.6 million
    fewer jobs on private payrolls.
  • The unemployment rate fell to 9.0 percent in January, and the number of unemployed was 13.9 million. 
  • It
    is not unusual for the monthly job growth reported by employers and the
    employment information in the Labor Department's household survey to
    tell somewhat different stories.   One reason for the discrepancy
    between the modest growth in payroll jobs and the decline in the
    unemployment rate is that there was essentially no growth in the
    labor force.  The labor force participation rate (the share of the
    population aged 16 and over working or looking for work) remained
    depressed at 64.2 percent, the lowest it has been since 1984.
  • As
    discussed above, the share of the population with a job, which
    plummeted in the recession to levels last seen in the mid-1980s was 58.4
    percent; prior to the current slump, the last time it was lower
    was August 1983.
  • It remains very difficult to find a
    job.  The Labor Department's most comprehensive alternative unemployment
    rate measure - which includes people who want to work but are
    discouraged from looking and people working part time because they can't
    find full-time jobs - was 16.1 percent in January, not much
    below its all-time high of 17.4 percent in October 2009 in data that go
    back to 1994.
  • Long-term unemployment remains a significant
    concern.  Over two-fifths (43.8 percent) of the 13.9 million people who
    are unemployed - 6.2 million people - have been looking for
    work for 27 weeks or longer.  These long-term unemployed represent 4.1
    percent of the labor force. Prior to this recession, the previous
    highs for these statistics over the past six decades were 26.0 percent
    and 2.6 percent, respectively, in June 1983.



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