January’s employment growth looks, unexpectedly, a lot like December. Economists and policy makers had feared the Omicron virus surge had put a damper on job growth. But nonfarm payroll employment grew by 467,000 in January. Economists had forecast an increase of only 150,000.
While this is good news, there are some continuing concerns, arguably minor. Intangible producing industries grew by 185,400 – but that was less than the growth in December of 214,400. The slower growth was due to a slight slowdown in growth in Arts, Entertainment, & Recreation and in Educational & Health Services. Employment in Government and the Information sector was up slight compared to December. Professional and Business Services had the largest growth of 87,300 – which was about the same as in December but much less than in October and November.
Employment in tangible producing industries grew by 281,900, driven by increases of 132,000 in Trade, Transportation & Utilities and 130,800 in Accommodation & Food Services. This is a pickup in growth in Trade, Transportation & Utilities, but roughly the same amount of job growth as in the previous month for Accommodation & Food Services. The number of jobs in Construction & Mining and in Telecommunications actually declined.
Employment increased but at a slower rate in Personal & Laundry Services, Repair & Maintenance, Manufacturing, and Financial. Tangible Business Services saw a slight increase in employment compared to a decline in December.
As I have noted in earlier postings, the labor market seems to have settled back into the post-Great Recession, pre-pandemic pattern of relatively equal growth in tangible-producing versus intangible-producing industries – but at a slower rate. The COVID-19 pandemic has done little to disrupt to dramatic shift in the tangible-intangible structural balance that emerged after the Great Recession.
For more on the categories, see my explanation of the methodology in an earlier posting.