Unemployment Rate

Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update highlights the unemployment rate.

• In January the unemployment rate declined again, settling at 8.3 percent.  This marks the third consecutive month of a decline of 0.2 percentage points in the unemployment rate.  In January 2011, the rate was 9.1 percent.
• The decline in the unemployment rate was driven by job growth.  243,000 payroll jobs were added in January including 257,000 private sector jobs.  The loss of 14,000 government jobs makes up the difference between the two figures.  Government jobs have declined in 16 of the last 18 months.
• Employment data are benchmarked annually and today’s release incorporates information from that benchmark.  The benchmark revisions led to an increase in total payrolls reported in December from 131.9 to 132.2 million. Revisions to the monthly reported net job change ranged from a gain of 64,000 jobs in June 2011 to a loss of 31,000 jobs in July.  Net job growth in 2011 as a result of the revisions was 1.7 million versus a previously reported 1.5 million.
• Looking at household data—the only place you’d find many REALTORS® since they are often independent contractors and wouldn’t be found in the payroll data—the reported number of employed individuals grew by 847,000.  339,000 of those came from the ranks of the unemployed and another 508,000 were additions to the labor force.  However, this data was also benchmarked based on the incorporation of Census 2010 data.  Taking out the effect of the benchmark, January was still a good month.  The number of employed rose by 631,000 the number of unemployed shrank by 381,000, and the labor force grew by 250,000.  This marked a flat labor force participation rate and an increase in the employment to population ratio.
• Other strong indicators are an increase in working hours, especially in the manufacturing industry.  The typical workweek increased by 0.3 hour to 40.9 hours.  Average hourly earnings also rose by 4 cents, a near average increase.  From one year ago, earnings are up 1.9 percent, a slightly below average increase which might be expected given the still elevated unemployment rate.