February 6, 2004 | WebMemo on Taxes
Increased Investment Pushes January Job Growth
Situation report from the Labor Department shows strong growth in
employment: 112,000 new jobs by the payroll survey and 496,000 by
the household survey. While the two surveys continue to diverge,
both show that more Americans are finding jobs and that employment
opportunities have been increasing for several months. Strong
evident in last week's GDP numbers, prefigured employment growth in
the retail sector and construction. The President's pro-growth
economic plan - and his tax cuts, especially - contributed to this
increase in employment.
- The total number
of U.S. workers is at an all-time high of 138.6 million.
- Unemployment rate
of 5.6 percent represents a healthy economy, and is down
significantly from 6.3 percent last June.
- Payroll jobs
increased by 112,000 over last month - the biggest gain since
- Payroll jobs have
increased by 366,000 since August.
- Preliminary job
growth in December was also revised up from 1,000 to 16,000.
increased by 496,000 workers in January, according the household
of Discouraged Workers
- There are 4
percent fewer discouraged workers today than one year ago.
- The rate of
discouraged workers is lower today than the mid-1990s.
- Teenagers account
for roughly two-thirds of lower labor force participation rates
since the peaks of the late 1990s. Because 10 percent fewer teens
are looking for work than in the 1990s, the overall participation
rate is down from its peak in the late 1990s.
Two Surveys, Two Revisions
The story of
diverging job growth between the two BLS surveys is now familiar,
but here is a refresher: before today the BLS survey of
establishments showed a decline of 776,000 payroll jobs during the
recovery, while the household survey shows growth of the workforce
by over 2.2 million. Today's revisions had very little impact on
that disparity (see ).
- The population
estimate from the Bureau of the Census was reduced, lowering the
household measure of total employment by 409,000, while the
household survey estimate of employment grew by 496,000. The
overall effect was a net gain in this measure of employment.
- Payroll surveys
were benchmarked to a complete count of companies, covering 98
percent of the workforce. As a result, original estimates of
nonfarm payroll employment over the last year were revised down.
Taking into account all revisions, 82,000 more jobs were created
from March to December of 2003 than previously estimated.
- The divergence in
total employment between the two surveys was not resolved by
today's revisions. Before today, the job growth gap was exactly
three million in the raw data. As of today:
- The revised
household survey measure increased by 2.2 million workers since the
end of the recession in November 2001.
- The revised
payroll survey measure declined by 716,000 jobs during that
- BLS does not
believe that new businesses are being missed by the payroll survey
but does acknowledge that "contractors," as a category of workers,
are missed by the payroll survey and are not counted among the