February 7, 2014

Weak Jobs Numbers Could Cause Pessimistic Short-Term Economic Outlook

Keith Hall

Former Senior Research Fellow
Summary

The Bureau of Labor Statistics today announced that the economy added 113,000 jobs in January, a second straight month of job gains coming in well below estimates after just 75,000 were added in December. Below, Mercatus Center senior research fellow Keith Hall—a former BLS commissioner—discusses the report.

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The Bureau of Labor Statistics today announced that the economy added 113,000 jobs in January, a second straight month of job gains coming in well below estimates after just 75,000 were added in December. Below, Mercatus Center senior research fellow Keith Hall—a former BLS commissioner—discusses the report.

“After an encouraging average of 204,000 jobs over the first 11 months of 2013, we’ve now seen an average of just 94,000 new jobs over the past two months. Even though 2013 had shown some promising signs for the labor market and GDP growth has been stronger, the last two job reports could dampen the short-term economic outlook.

“Just as in December, there is little evidence of an effect of bad weather on the January jobs numbers, as average weekly hours were unchanged at 34.4 hours and construction employment rose by 48,000.

“After the labor force participation rate fell from 63.7 to 62.8 percent during 2013, we saw a slight recovery back to 63.0 percent in January. However, it remains at a very low level for all age ranges below 55 years old. The weak labor market also continues to dampen wage growth, as average hourly earnings have grown just 1.9 percent over the past twelve months.”