Hiring picked up in January with plentiful opportunities remaining. Here are the five things we learned from U.S. economic data released during the week ending February 4.
Payrolls grew more quickly than expected in January. Nonfarm payrolls expanded by a seasonally adjusted 467,000 during the month, larger than expected even as omicron spread across the nation. The Bureau of Labor Statistics measure remained 2.9 million under its pre-pandemic peak of February 2020 but has rebounded by 19.1 million workers since its April 2020 trough. (The data series also saw significant revisions, which resulted in 217,000 more filled jobs in 2021 than previously estimated). The private sector added 444,000 workers, split between the goods-producing and services sectors by 4,000 and 440,000 jobs, respectively. Industries adding the most worker in January were leisure/hospitality (151,000), retail (61,400), professional/business services, and transportation/warehousing (54,200). Average hourly earnings of $31.63 were 5.7 percent above year-ago levels.
The separate household survey has the unemployment rate inching up by 1/10th of a percentage point to 4.0 percent. The labor force participation rate grew by 3/10ths of a percentage point to 62.2 percent (the same rate for adults 25-54 added 1/10th of a percentage point to a pandemic high of 82.0 percent). Falling to a pandemic low were the number of part-time workers seeking a full-time job (down 212,000 to 3.717 million), the median length of unemployment (down 2.8 weeks to 10.1 weeks), and the broadest measure of underemployment (the U-6 series, down 2/10ths of a percentage point to 7.1 percent).
Open jobs remained unfilled, and workers continued to quit in December. The Bureau of Labor Statistics reports that there were a seasonally adjusted 10.925 million open jobs at the end of December. There were 150,000 more open jobs relative to November, with openings up 59.6 percent from a year earlier. Industries with over a million available positions included professional/business services, health care/social assistance, accommodation/food services, retail, and government. However, hiring slowed by 267,000 to 6.263 million (+15.7 percent versus December 2020). 5.9 million people departed their jobs in December, down 305,000 from the previous month and up 5.7 percent from a year earlier. In December, a near-record 4.338 million people quit their jobs (off 161,000 from November, but 27.3 percent ahead of year-ago levels). Layoffs slowed by 140,000 to 1.169 million (down 35.9 percent from a year earlier).
December was a quieter month for factory orders. The Census Bureau estimates new orders for manufactured goods slowed 0.4 percent during the month to a seasonally adjusted annualized rate (SAAR) of $530.7 billion. Orders totaled $6.076 trillion for all of 2021, up 16.9 percent from the previous year. Orders for durable and nondurable goods fell 0.7 percent and 0.2 percent, respectively. Shipments increased 0.4 percent in December to $528.9 billion and 12.8 percent to $6.041 trillion for all of 2021. Durable goods shipments rose 1.0 percent during the month, but nondurables shipments fell 0.2 percent. Unfilled orders swelled by a half-percentage point to $1.268 trillion, with the inventories-to-sales ratio adding two basis points to 6.81. Inventories expanded 0.3 percent to $773.0 billion.
The pace of growth wavered in both manufacturing… The Manufacturing PMI declined by 1.2 points in January to a reading of 57.6. The Institute for Supply Management’s measure has been above a reading of 50.0—the threshold between a growing and shrinking sector— for 20 consecutive months. While the employment index component improved, those associated with new orders, production, and inventories fell. Fourteen of 18 manufacturing industries reported growth during the month, led by apparel and furniture. Survey respondents reported “hiring difficulties and labor turnover” led to many manufacturers struggling to meet demand.
…and the service sector. The ISM’s Services PMI shed 2.4 points in January to a reading of 59.9. The Services PMI has been above 50.0 for 20 straight months. Falling were measures for business activity/production, new orders, and employment. The inventories index improved but still came in at a contractionary reading of 49.7. Fifteen of 18 service sectors expanded during the month, led by construction, retail, and health care/social assistance. Weighing down the service sector were “capacity constraints, demand-pull inflation, logistical challenges, and labor shortages.”
Other U.S. economic data released over the past week:
- Jobless Claims (Week ending January 29, 2022, First-Time Claims, seasonally adjusted): 238,000, -23,000 vs. the previous week, -599,000 vs. the same week a year earlier). 4-week moving average: 255,000 (-70.5% vs. the same week a year earlier).
- Vehicles Sales (January 2022, Autos and Light Trucks, seasonally adjusted annualized rate): 15.041 million (+19.9% vs. December 2020; -10.4% vs. January 2021).
- Construction Spending (December 2021, Value of Construction Put in Place, seasonally adjusted annual rate): $1.640 trillion (+0.2% vs. November 2021; +8.2% vs. December 2021).
- Productivity (2021Q4, Nonfarm Business Labor Productivity, seasonally adjusted annualized rate): +6.6% vs. 2021Q3; +2.0% vs. 2020Q4.
- Bankruptcies (2021, Business and Nonbusiness Bankruptcy Filings): 413,616 (-24.0% vs. 2020).
- Agricultural Prices (December 2021, Prices Received by Farmers, not seasonally adjusted): +3.5% vs. November 2021; +23.7% vs. December 2021.
- Senior Loan Officer Opinion Survey
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What We Learned About the U.S. Economy Last Week 