According to the U.S. Bureau of Labor Statistics (BLS), the economy added 353,000 jobs in the first month of 2024, yet the unemployment rate remained at 3.7 percent despite January's headline number beating expectations for just 180,000 jobs to be added.
The government report showed job gains in professional and business services, health care, retail trade, and social assistance while mining, quarrying, and the oil and gas extraction industries saw employment decline.
Payroll employment rises by 353,000 in January; unemployment rate remains at 3.7%https://t.co/ZwrVfLviqL #JobsReport #BLSdata
— BLS-Labor Statistics (@BLS_gov) February 2, 2024
The rosy picture painted by the BLS and its headline number, however, is not the whole story. Notably, the job gains reported by BLS are contradicted by trends in the recent ADP, unemployment claim, and Challenger reports.
The Bureau of Labor Statistics itself "cautioned" in December 2023 that "population adjustments can affect the comparability" of jobs report data when fresh estimates were introduced for the new year that can "effect...selected labor force measures between December 2023 and January 2024." That means this first jobs report of the new year can't be directly compared to monthly reports from 2023.
Notably, the January report did not reflect the tens of thousands of job cuts announced by major companies at the start of 2024. Google, Amazon, iRobot, Salesforce, BlackRock, and Zoom have already announced or laid off hundreds of employees each according to tracking from the Wall Street Journal. Xerox is laying off a few thousand employees, Wayfair is laying off more than 1,600 workers, UPS is set to cut some 12,000 positions in 2024, Microsoft will lay off nearly 2,000 members of its video game staff, and more than 2,300 Macy's employees will be cut.
Recommended
President and CEO of the Job Creators Network Alfredo Ortiz noted that "Friday's jobs report is not the home run that Democrats and the mainstream media claim," pointing out that job growth "continued to disproportionately occur in unproductive sectors such as government, healthcare, and social assistance" that are important but "not the high-innovation, pro-growth jobs the country needs to outcompete China and overcome historic inflation."
"Employment actually declined last month in the mining, quarrying, and oil and gas extraction industry," Ortiz highlighted. "This economic sector lubricates the American economy and provides jobs to support a family on," yet Biden's "recent LNG export ban will only further depress this vital sector of the economy."
And while President Biden is likely to trot out another victory lap on the topline number from January's BLS jobs report, the data under the headline does not show the workforce expanding or American workers making more money compared to the end of 2023.
One such statistic: the labor force participation rate, at 62.5 percent, was unchanged in January despite the reported addition of more than 350,000 jobs.
Despite the Biden administration's claims that wages are rising — all while and after American workers saw negative real wages for more than 24 consecutive months due to Democrat-triggered inflation — January's jobs report showed that Americans are actually taking home a slightly smaller paycheck now than they were in December 2023 as employers continue to reduce hours for their workers.
The most important part of the jobs report - how much money are people making. Turns out people earned less in January than December because of fewer hours. pic.twitter.com/IGs6n1tdSi
— Charles V Payne (@cvpayne) February 2, 2024
In January, the average workweek slipped again, decreasing by 0.2 hours to just 34.1 hours. That is, even though workers may have gotten a raise to try to make up for lagging real wages due to inflation, they're working fewer hours and therefore earning less than they did before.
Still, the first jobs report of the new year seems to make the prospect of an interest rate cut by the Federal Reserve less likely as chairman Jerome Powell seeks to reduce inflation to a target rate of just 2.0 percent by squeezing the life out of the economy. Biden's expected bragging about January's number tells the story: if the economy is booming, inflation is set to continue as it has after reaching 40-year highs on his watch. But, in an election year, it's never safe to assume good and logical policy will prevail over political expedience.
Join the conversation as a VIP Member