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An ambiguous January 2014 employment report released today by the Bureau of Labor Statistics (BLS) provided the latest indications of the strength of the US jobs market. The January figures are a slight improvement from December’s report, which showed mixed signs of improvement in the labor market. Regardless, IT unemployment fell to an amazing 2.3 percent.
In January, the U.S. nonfarm payroll increased 113,000 jobs, shy of the 2013 average of 194,000 jobs added each month. This shortcoming is the second consecutive month where job creation was below average.
Although the number of jobs added was lackluster, the unemployment rate edged slightly down to 6.6 percent. This is 0.1 percent lower than last month and 1.3 percent lower compared to January 2013, signifying continued stability in the economy.
Reading Between the Lines
The unemployment rate alone does not fully depict the vigor within the U.S. workforce. The labor force participation rate is another significant indicator and it has increased 0.2 percentage point to 63 percent, offsetting a change of the same magnitude in December. Since the recession, the labor force participation rate has been declining, signaling an increasingly unmotivated workforce.
Much of the U.S. seems uninterested as the number of those left out of the labor force increased by over 2.6 million people since a year ago. Discouraged workers are those who are not currently looking for work because they believe there are no jobs available or there are none for which they would qualify, and they are not accounted for in the unemployment rate. The number of discouraged workers has also increased since January of last year.
Along with this disappointing notion, those people who currently want a job decreased, while the number of marginally attached workers increased since last January.
Certain sectors saw better gains as outlined by the bureau’s January release, with solid increases for construction, manufacturing and IT.
The construction sector saw its largest one-month increase in employment since March of 2007, while manufacturing also saw commendable growth. Economists pay special attention to these two sectors as they are leading indicators of the health of the labor market and the economy as a whole.
Information technology also saw a great month, according to the latest BLS release. The number of unemployed IT professionals has fallen a whopping 38 percent since last January and has garnered an extremely low 2.3 percent unemployment rate. Historically, the IT unemployment rate has been lower than the overall unemployment rate. This is no surprise to anyone familiar with IT, an industry where demand for talent often outweighs the supply.
Professional and business services continued an upward trend in January along with temporary help services. This growth is in line with TEKsystems’ 2014 Annual IT Forecast where many IT Leaders expressed plans to utilize the temporary segment more than they did 2013.
In summation, the January jobs report points to continued recovery although lacking the vitality one would want to see. The monthly report is only a snapshot of the employment situation, and one whose accuracy is susceptible to variables such as the recent winter weather as well as the topical termination of long-term jobless benefits. Looking forward, the recent slow gains in employment need to be offset with more substantial improvements to keep the economy from plateauing.