The headline seasonally adjusted BLS job growth was above expectations. 

Analyst Opinion of the BLS Employment Situation

The household and establishment surveys could not be compared this month – according to the BLS “December – January changes in household data are not shown due to the introduction of updated population controls”. This was a confusing report so I will pass on making any other comments.

The year-over-year rate of growth for employment accelerated this month (blue bars on graph below). This is a year-over-year analysis which has no seasonality issues.

Economic intuitive sectors of employment were positive.

This month’s report internals (comparing household to establishment data sets) was marginally consistent with the household survey showing seasonally adjusted employment added —– vs the headline establishment number expanding —–. [note: according to the BLS “December – January changes in household data are not shown due to the introduction of updated population controls”] The point here is that part of the headlines are from the household survey (such as the unemployment rate) and part is from the establishment survey (job growth). From a survey control point of view – the common element is jobs growth – and if they do not match, your confidence in either survey is diminished. [note that the household survey includes ALL jobs growth, not just non-farm).

The household survey added —– people to the labor force. [note: according to the BLS “December – January changes in household data are not shown due to the introduction of updated population controls”]

A summary of the employment situation:

BLS reported: 200K (non-farm) and 196K (non-farm private). Unemployment rate unchanged at 4.1 %.

ADP reported: 234K (non-farm private)

In Econintersect‘s January 2018 economic forecast released in late December, we estimated non-farm private payroll growth at 165,000 (based on economic potential) and 180,000 (fudged based on current overrun / under-run of economic potential).

The market expected (from Bloomberg / Econoday):

Seasonally Adjusted Data Consensus Range Consensus Actual Nonfarm Payrolls – M/M change 150,000 to 205,000 176,000 200,000 Unemployment Rate – Level 4.0 % to 4.2 % 4.1 % 4.1 % Private Payrolls – M/M change 142,000 to 200,000 172,000 196,000 Manufacturing Payrolls – M/M change 5,000 to 22,000 18,000 15,000 Participation Rate – level 62.6 % to 62.7 % 62.7 % 62.7 % Average Hourly Earnings – M/M change 0.2 % to 0.3 % 0.3 % +0.3 % Average Hourly Earnings – Y/Y change 2.5 % to 2.7 % 2.6 % +2.9 % Av Workweek – All Employees

34.4 hrs to 34.5 hrs

34.5 hrs 34.3 hrs

The BLS reports seasonally adjusted data – manipulated with multiple seasonal adjustment factors, and Econintersect believes the unadjusted data gives a clearer picture of the jobs situation.