January 2007 Employment Situation

Historical release narrative reproduced from the official public-domain source. Statistical tables, standard technical appendices, administrative material and attendance rosters are omitted; formatting is adapted for reading. Figures retain the release's historical context and may have been revised. Consult the linked source for the complete document.

Nonfarm payroll employment rose by 111,000 in January, and the unemployment rate was essentially unchanged at 4.6 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Job growth continued in sev- eral service-providing industries over the month, and construction employment also rose. The number of manufacturing jobs continued to decline.

Unemployment (Household Survey Data)

The number of unemployed persons (7.0 million) and the unemployment rate (4.6 percent) were about unchanged in January. Over the month, the unemploy- ment rate for Hispanics (5.7 percent) increased, while the rates for the other major worker groups--adult men (4.1 percent), adult women (4.0 percent), teen- agers (15.0 percent), whites (4.1 percent), and blacks (8.0 percent)--were little changed. The unemployment rate for Asians was 3.2 percent, not season- ally adjusted. (See tables A-1, A-2, and A-3.)

Total Employment and the Labor Force (Household Survey Data)

In January, both total employment (146.0 million) and the employment-popu- lation ratio (63.3 percent) were essentially unchanged. The civilian labor force (153.0 million) and the labor force participation rate (66.3 percent) were also about the same as in December. The participation rate in January was 0.3 percentage point higher than a year earlier. (See table A-1.)

Persons Not in the Labor Force (Household Survey Data)

About 1.6 million persons (not seasonally adjusted) were marginally at- tached to the labor force in January--essentially unchanged from a year ago. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months. They were not counted as unemployed, because they had not searched for work in the 4 weeks preceding the survey. Among the marginally attached, there were 442,000 discouraged workers in January, about the same as a year earlier. Discouraged workers were not currently looking for work specifically because they believed no jobs were available for them. The other 1.1 million persons marginally attached to the labor force in January had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities. (See table A-13.)

1 Changes in household data levels are not shown due to the introduction of updated population controls. See the note on page 6 for more information. 2 Establishment data have been revised to reflect March 2006 benchmark levels and updated seasonal adjustment factors. See the note on page 5 for more information. 3 Includes other industries, not shown separately. 4 Quarterly averages and the over-the-month change are calculated using unrounded data. 5 Data relate to private production and nonsupervisory workers. p = preliminary.

Industry Payroll Employment (Establishment Survey Data)

In January, total payroll employment increased by 111,000, to 137.3 million, seasonally adjusted. This increase followed gains of 196,000 in November and 206,000 in December (as revised). In 2006, payroll employment rose by an aver- age of 187,000 per month. In January, employment continued to increase in some service-providing industries. In addition, construction employment was up, while manufacturing employment continued to trend down. (See table B-1.)

In the service-providing sector, health care employment was up by 18,000 in January, following a gain of 43,000 in December. In 2006, health care employ- ment increased by an average of 28,000 a month. In January, employment con- tinued to trend up in hospitals, ambulatory health care, and nursing and res- idential care facilities.

Professional and business services employment continued to trend up in January (+25,000), following large gains that averaged 69,000 in the prior 2 months. Within this industry, employment in architectural and engineering services rose by 9,000 over the month.

Food services employment was up by 21,000 in January. Over the past 12 months, the industry added 347,000 jobs. Employment continued to expand over the month in transportation and warehousing; the industry has gained 116,000 jobs over the year.

Elsewhere in the service-providing sector, employment was essentially unchanged over the month in both wholesale and retail trade. Employment in financial activities was about unchanged; within the industry, insurance carriers lost 6,000 jobs. In information, employment was little changed following a large increase in December.

In the goods-producing sector, construction employment was up by 22,000 in January. Employment gains in nonresidential building (9,000) and in nonresidential specialty trade contracting (19,000) more than offset small declines in residential construction. Since its peak in February 2006, residential specialty trade contracting has lost 104,000 jobs while its nonresidential counterpart has added 126,000 jobs.

Manufacturing employment continued to trend down over the month. Job losses continued in motor vehicles and parts (-23,000), in furniture and re- lated products (-4,000), and in textile mills (-4,000). Computer and peri- pheral equipment lost 6,000 jobs over the month. An increase in plastics and rubber employment reflected the return of workers from a strike. Elsewhere in the goods-producing sector, mining employment was essentially unchanged.

Weekly Hours (Establishment Survey Data)

The average workweek for production and nonsupervisory workers on private nonfarm payrolls fell by 0.1 hour to 33.8 hours in January. Weekly hours for factory workers declined by 0.2 hour to 40.8 hours, while factory overtime hours decreased by 0.1 hour to 4.1 hours. Since peaking in July, the factory workweek fell by 0.7 hour. (See table B-2.)

The index of aggregate weekly hours of production and nonsupervisory workers fell by 0.1 percent in January to 106.7 (2002=100). The manufacturing index fell by 0.8 percent to 94.4. (See table B-5.)

Hourly and Weekly Earnings (Establishment Survey Data)

Average hourly earnings of production and nonsupervisory workers on private nonfarm payrolls increased by 3 cents, or 0.2 percent, in January to $17.09. This increase followed a gain of 7 cents in December. Average weekly earnings fell by 0.1 percent in January to $577.64. Over the year, both hourly earnings and weekly earnings rose by 4.0 percent. (See table B-3.)

Revisions to Establishment Survey Data

In accordance with annual practice, the establishment survey data have been revised to reflect comprehensive universe counts of payroll jobs, or benchmarks. These counts are derived principally from unemployment insurance tax records for March 2006. As a result of the benchmark process, all not seasonally adjusted data series were subject to revision from April 2005 forward, the time period since the last benchmark was established. In addition, with this release, the seasonally adjusted establishment survey data from January 2002 forward were subject to revision due to the introduction of updated seasonal adjustment factors.

The February 2007 issue of Employment and Earnings will contain an article that discusses the benchmark and post-benchmark revisions. This issue also will provide revised estimates for all regularly published tables containing national establishment survey data on employment, hours, and earnings. LABSTAT, the BLS public database on the Internet, contains all revised historical Current Employment Statistics (CES) data. The data, as well as the Employment and Earnings article and accompanying tables, can be accessed through the CES homepage at http://www.bls.gov/ces/. Information on the revisions released today also may be obtained by calling (202) 691-6555.

(In thousands)

Adjustments to Population Estimates for the Household Survey

Effective with data for January 2007, updated population controls have been used in the household survey. Population controls for the household survey are developed by the U.S. Census Bureau. Each year, the Census Bureau updates the controls to reflect new information and assumptions about the growth of the population. The change in population reflected in the new controls results from adjustments to the estimates of net international migration and updated vital statistics information.

Official population and labor force estimates for December 2006 and earlier months will not be revised. To assess the impact of the updated population controls on trend growth, however, December 2006 estimates for selected data series (not seasonally adjusted) were recalculated using the new controls. The differences from estimates based on the old controls are shown in table C. The adjustments increased the estimated size of the civilian noninstitutional popu- lation by 321,000, of the civilian labor force by 163,000, and of employment by 153,000; the new population controls had a negligible impact on unemployment rates and other percentage estimates. Table D shows the effect of the intro- duction of new population controls on the over-the-month changes between Decem- ber 2006 and January 2007. More detailed information on the population adjust- ments and their effect on national labor force estimates is available at http://www.bls.gov/cps/cps07adj.pdf on the Internet and also will be published in the February 2007 issue of Employment and Earnings.