The Non-Farm Payrolls report just came out, and it was a big miss.
Just 113,000 new jobs were created in January vs. 180,000 expected.
But there are two parts to every jobs report.
One is the Establishment Survey, where they ask businesses how many people they hired in the month. That’s where the 113,000 number came from.
But the other part is the Household Survey, where they ask households whether they gained/lost jobs in the month.
And that side of this report was amazing.
After accounting for the annual adjustment to the population controls, the civilian labour force rose by 499,000 in January, and the labour force participation rate edged up to 63.0 per cent. Total employment, as measured by the household survey, increased by 616,000 over the month, and the employment-population ratio increased by 0.2 percentage point to 58.8 per cent.
Got that? Households reported 616,000 new jobs in the month, and the participation rate rose. And unemployment fell from 6.7% to 6.6%. And the unemployment rate for those with only a high school education fell from 7.1% to 6.5% in one month!
Oh, and the jobs that were created? They were not part-time jobs. In fact, there was a huge drop in people saying they were doing part time hours
The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) fell by 514,000 to 7.3 million in January.
As for why there are two parts to the jobs report, and why they can be so different, the BLS explains:
The household survey and establishment survey both produce sample-based estimates of employment, and both have strengths and limitations. The establishment survey employment series has a smaller margin of error on the measurement of month-to-month change than the household survey because of its much larger sample size. An over-the-month employment change of about 100,000 is statistically significant in the establishment survey, while the threshold for a statistically significant change in the household survey is about 400,000.
So you have to take all of the data. According to establishments, January was pretty meh. According to households, it was a great month.