January Job Creation Trails Expectations

February 4, 2005 (PLANSPONSOR.com) - The number of new nonfarm jobs added in January came in at an unexpectedly low 146,000, according to the US Department of Labor's Bureau of Labor Statistics (BLS).

Not only was the figure below the expected 190,000 new jobs, but the Labor Department also downwardly revised. December’s gain to 133,000 gain and cut its estimate of jobs created in October and November, trimming a total of 59,000 jobs over the fourth quarter of 2004.

Despite the relatively weak report, the BLS said January’s unemployment rate fell to 5.2%, the lowest level since a 5% reading in September 2001.

According to the BLS data,employment in financial activities rose by 21,000 in January.  Both credit intermediation and securities, commodities, and investments contributed to the gain.  Over the year, employment in financial activities increased by 159,000, with most of the gain occurring during the last 6 months

Education and health services continued to add jobs in January, increasing by 35,000.  Within the sector, health care employment rose by 15,000 over the month and was up by 258,000 over the year.  Employment in educational services edged up in January and the industry added 86,000 jobs over the year.
Meanwhile, in transportation and warehousing, employment increased by 34,000 in January.  Since its most recent low in July 2003, employment in this sector has grown by 166,000, with trucking accounting for about a third of the growth.  Within transportation and warehousing, employment in the couriers and messengers industry grew by 17,000 in January after a loss of 9,000 in December.

Although employment was flat in January, wholesale trade has added 99,000 jobs since its most recent low in August 2003.  Retail trade employment edged up over the month and has expanded by 200,000 since June 2003.
Employment in professional and business services edged up in January. Over the year, the sector gained 537,000 jobs.  Within the sector, employment in temporary help services continued to trend up.  Employment in architectural and engineering services and in computer systems design had been showing strength in recent months, but was flat in January.
In January, manufacturing employment declined by 25,000, with widespread, though mostly small, losses among its component industries.  Industries registering significant declines included motor vehicles and parts (-10,000), chemicals  (-5,000), and semiconductors and electronic components (-2,000). After reaching an employment trough in February 2004, manufacturers added 85,000 workers through August.