The employment report released this morning by the Bureau of Labor Statistics shows that we added 113,000 jobs in January. That brings the average growth rate of the last three months to just 154,000. At this pace, it will take more than six years to get back to pre-recession labor market conditions.
The unemployment rate declined by one-tenth of a percentage point to 6.6 percent, and in an unusual turn in recent months, the decline was for good reasons—a higher share of the potential workforce found work, with the share of the workforce with a job rising by two-tenths of a percentage point. The labor force participation also rose by two-tenths of a percentage point. Labor force participation is still very depressed; there are still 5.7 million missing workers (workers who have given up looking for work, or never started, because job openings are so weak) but this is a step in the right direction.
However, when the two surveys tell different stories as they do today (weak employment growth in the establishment survey but strong employment growth in the household survey), the rule of thumb is to place much more weight on what the establishment survey says, because it has a much larger sample size. In other words, altogether, today’s data show that 2014 did not get off to a strong start.