January Sees 467,000 New Jobs, Stable Unemployment Rate

The U.S. economy added 467,000 nonfarm payroll jobs in January 2022, as the unemployment rate rose marginally to 4.0%. Growth in employment continued in leisure and hospitality, professional and business services, retail trade, and transportation and warehousing.

Job growth was much stronger than the estimate of 150,000, as compiled by Dow Jones. The forecast unemployment rate was 3.9%, essentially equal to the actual. This jobs report surprised many observers, especially since the White House had issued warnings that any job gains might be very low because of the omicron variant of COVID-19.

Unemployment Rate Largely Unchanged

The unemployment rate in January 2022 of 4.0% represented a slight increase of 0.1 percentage point from 3.9% in December 2021. The number of unemployed persons, at 6.5 million, was largely unchanged from December. Over the year, these figures are down by 2.4 percentage points and 3.7 million, respectively. As another point of comparison, in February 2020, prior to the outbreak of the COVID-19 pandemic, the unemployment rate was 3.5%, and the number of unemployed persons was 5.7 million.

Long-Term Unemployed Persons Decline

The number of long-term unemployed (people who have been jobless for 27 weeks or more) declined to 1.7 million from 2.0 million in December 2021. This figure is down from 4.0 million a year earlier but is 570,000 higher than the pre-pandemic measure in February 2020. The long-term unemployed represented 25.9% of the total unemployed in January 2022.

Labor Force Participation Largely Steady

The labor force participation rate in January 2022 was 62.2%, up slightly from 61.9% in December. This was the high for the year. The employment-to-population ratio was little changed at 59.7%. The pre-pandemic figures in February 2020 were 63.4% and 61.2%, respectively.

Number of Potential Job Seekers Unchanged

The number of persons who were not in the labor force but who would like to take a job was little changed at 5.7 million in January. This figure has dropped by 1.3 million during the year, but it is 708,000 higher than in February 2020. These people were not classified as unemployed since they either were not actively looking for work during the four weeks preceding the survey or were
unavailable to take a job. The number of discouraged workers, those who believed that no jobs were
available for them, also was little changed over the month, at 408,000.

Hourly Earnings Up, Hours Worked Down

In January 2022, the average hourly earnings for all employees on private nonfarm payrolls rose by 23 cents (or 0.7%) to $31.63. Over the past 12 months, average hourly earnings have increased by 5.7%.

Meanwhile, the average workweek for all employees on private nonfarm payrolls fell by 0.2 hour to 34.5 hours in January. In manufacturing, the average workweek edged down by 0.1 hour to 40.2 hours, and overtime edged up by 0.1 hour to 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls decreased by 0.2 hour to 33.9 hours.

Biggest Job Gains by Industry

The biggest job gains for January 2022 were concentrated in these industries: leisure and hospitality (+151,000 jobs), professional and business services (+86,000 jobs), retail trade (+61,000), transportation and warehousing (+54,000 jobs), local government education (+29,000), health care (+18,000), and wholesale trade (+16,000). These industries combined to add 415,000 jobs, or 88.9% of the January total of 467,000.

COVID-19 Impacts

In January 2022, the share of employed persons who teleworked at some point because of the COVID-19 pandemic increased to 15.4%. Meanwhile, 6.0 million persons reported that they had been unable to work at some point because their employer closed or lost business due to the pandemic. This is nearly double the figure of 3.1 million in December 2021.

Among those who reported in January that they were unable to work because of pandemic-
related closures or lost business, 23.7% received at least some pay from their employers for the hours not worked. This was up from the prior month.

Among those not in the labor force in January, 1.8 million persons were prevented from looking for work due to the pandemic, up from 1.1 million in the prior month. To be counted as unemployed, by definition, individuals must be either actively looking for work or on temporary layoff.

Changes to the Data

Survey data have been revised as a result of an annual benchmarking process and the updating of seasonal adjustment factors. Also, household survey data for January 2022 reflect updated population estimates. The news release from the U.S. Bureau of Labor Statistics (BLS) gives more detail on these and other changes.

Kathy Jones, chief fixed income strategist at Charles Schwab, told CNBC: "The benchmark revisions helped the numbers a bit just because it moved out some of the seasonal factors that have been at work. But overall the job market is strong, particularly in the face of omicron. It's hard to find a weak spot in this report."