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January Jobs Numbers

POSTED: February 03, 2012, 12:00 am

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The Bureau of Labor Statistics (BLS) monthly Employment Situation Summary for January bore good news for the Obama administration. The BLS reports widespread job growth in all most areas of the private sector, though government employment remained unchanged. Total nonfarm employment increased by 243,000 and the overall unemployment rate dropped to 8.3 percent.

Black unemployment, which crept up in December, showed a pronounced decline from 15.8 percent to 13.6 percent. While some of this decrease might be attributed to “discouraged workers,” those persons dropping out of the job search because they do not believe they can find work, the drop is significant nonetheless. Black male unemployment, the highest among all adult groups, dropped from 15.7 percent last month to 12.7 percent in January, and the unemployment rate for Black women decreased to 12.6 percent from 13.9 percent in December 2011. Black youth, the group facing the highest unemployment rates among all workers; saw their unemployment rate fall to 38.5 percent from 42.1 percent in December. These numbers represent a much needed example of progress for an administration that has been perplexed in addressing Black joblessness, and the nation’s first African-American President who has been challenged to convince the Black community that they have not been forgotten in the economic recovery.

Private sector employment grew by 257,000 jobs with the largest gains coming in the professional and business services, leisure and hospitality, and manufacturing sectors. The President just announced a plan to bolster manufacturing in the country so January’s numbers give the White House ammunition when negotiating with Republicans on Capitol Hill. Professional and business services added 70,000 jobs last month with the biggest gain (33,000) in employment services. The leisure and hospitality sector saw a jump of 44,000 new jobs, mostly in food services and drinking establishments. Employment in health care continued to increase, adding 31,000 jobs last month. Retail trade showed an increase with new jobs in department stores (19,000), health and personal care stores (7,000) and automobile dealers (7,000). The latter is a positive sign because it reflects rising consumer confidence if automobile sales are prompting dealers to hire more employees.

One of the unexpected bright spots has been manufacturing. In January 50,000 new jobs were created, with nearly all of the increase in durable goods manufacturing. Employment in construction also improved last month, adding 21,000 jobs following a gain of 31,000 in December. The BLS reports that over the last two months, nonresidential specialty trade contractors added 30,000 jobs. In his State of the Union address President Obama proposed using some of the savings accrued from the military withdrawal from Iraq toward an infrastructure program to rebuild the nation’s transportation, water and waste infrastructure. If the administration can advance such a program it would potentially provide an additional boost to private sector construction employment.
One area that continued to decline was government employment, a sign of the downsizing of both the federal government and state governments’ bureaucracies. It is likely these jobs will never return. This has been a particular difficult transition for Black workers as many African-Americans were employed by government and these jobs contributed greatly to the development of a Black middle class. The challenge going forward for many former government workers will be to retrain for opportunities in the private sector, a process that can take time and a situation which points to the importance of extended unemployment benefits for workers out of the labor market.

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