Lewis Diuguid

Lewis Diuguid: Happy Days! Unemployment rate dips below 5% for the first time since February 2008

A job seeker in late January speaks with a company representative during a Choice Career Fair event in Seattle. The Labor Department reported that last month for the first time since February 2008, the unemployment rate dipped below 5 percent.
A job seeker in late January speaks with a company representative during a Choice Career Fair event in Seattle. The Labor Department reported that last month for the first time since February 2008, the unemployment rate dipped below 5 percent. Bloomberg

At the White House, people had to be singing “Happy Days Are Here Again” with the Labor Department release of employment numbers for January.

It was astounding news. The unemployment rate dipped from 5 percent in December to 4.9 percent for January. It was the first time since February 2008 that the jobless rate fell below 5 percent.

President George W. Bush was finishing his final of eight years in the White House, and people like Sens. Barack Obama, Hillary Clinton and John McCain were traveling the country campaigning for the Oval Office job. We know how that turned out, and we’re getting a re-run from presidential hopefuls now.

Employers in January added 151,000 jobs, “extending the longest streak of private-sector job growth on record to 71 months,” the Labor Department reported. “All told, 14 million private-sector jobs have been created since early 2010.”

That’s a far cry from the job killing Great Recession, which ran from December 2007 to October 2009 with a peak unemployment of 10 percent.

“So, unemployment, deficits, gas prices are all down,” President Barack Obama said Friday. “Jobs, wages, and the rate of the insured are up.

“I should mention, by the way, that since I signed Obamacare into law, nearly 18 million Americans have gained coverage, and our businesses have created jobs every month since. On net, all of them full-time jobs.

“So, as I said at my State of the Union address, the United States of America, right now, has the strongest, most durable economy in the world. I know that’s still inconvenient for Republican stump speeches as their doom and despair tour plays in New Hampshire.

“I guess you cannot please everybody.”

The jobs created in January trail the December jobs number of 292,000. Employment gains in the October-December quarter averaged 284,000, the best three-month increase since January 2014. Unemployment insurance claims remain near historic lows, with 285,000 initial claims during the last week of January, the Labor Department reported.

“Claims have been at or under 300,000 for 48 consecutive weeks, the first time that’s happened since December of 1973,” the department noted. The number of unemployed persons in January was 7.8 million.

The average hourly earnings for all employees on private nonfarm payrolls ticked up 12 cents in January to $25.39 an hour.

“Over the year, average hourly earnings have risen by 2.5 percent,” the Labor Department reported. “In January, average hourly earnings of private-sector production and nonsupervisory employees rose by 6 cents to $21.33.”

That’s good news, but the stock market didn’t react that way Friday, shedding some of the gains picked up earlier in the week possibly over China’s weakening economy or fears of a new recession and the Federal Reserves raising rates again. But the Labor Department numbers certainly looked like good news for workers and retailers, who always benefit when more people are employed.

“Among the major worker groups, the unemployment rates for adult men (4.5 percent) and whites (4.3 percent) declined in January,” the report said. “The jobless rates for adult women (4.5 percent), teenagers (16 percent), blacks (8.8 percent), Asians (3.7 percent), and Hispanics (5.9 percent) showed little change over the month.

The number of long-term unemployed, people who have been without jobs for 27 weeks or more, remained unchanged in January, at 2.1 million and has shown little difference since June. The long-term unemployed accounted for 26.9 percent of the total unemployed for January.

The Labor Department noted that there were 623,000 discouraged workers in January, essentially unchanged from last year. “Discouraged workers are persons not currently looking for work because they believe no jobs are available for them,” the department said.

“The remaining 1.5 million persons marginally attached to the labor force in January had not searched for work for reasons such as school attendance or family responsibilities.”

  Comments