January Employment Report

The BLS reports: U.S. nonfarm payrolls rose by 111,000 in January, after a revised 206,000 gain in December. The unemployment rate rose slightly to 4.6% in January. Note: The establishment survey data in this release have been revised as a result of the annual benchmarking process.

Click on graph for larger image.

Here is the cumulative nonfarm job growth for Bush's 2nd term. The gray area represents the expected job growth (from 6 million to 10 million jobs over the four year term). Job growth has been solid for the last two years and is near the top of the expected range.

The following two graphs are the areas I've been watching closely: residential construction and retail employment.


Residential construction employment decreased by 11,400 jobs in January and is down 112.2 thousand, or about 3.2%, from the peak in February. This is just the beginning of the loss of several hundred thousand residential construction jobs over the next year or so.

Note the scale doesn't start from zero: this is to better show the change in employment.


Retail employment gained 4,000 jobs in January. The YoY change in retail employment is now -0.2%.

With the large revisions to previous reports, it is difficult to judge this report. Overall this is a solid report. The expected job losses in residential construction employment has just started, but the spillover to retail isn't significant yet. I expect the rate of residential construction job losses to increase over the next few months.