DemDaily: Reading The Jobs Report

February 9, 2022

President Joe Biden took a victory lap last week with the release of the unexpectedly strong jobs reports for January and, overall, historically strong employment gains over the past year.

At a press conference on Friday, the president said, "history has been made here," reporting that 467,000 jobs were created in January and, that in his first year of office, the United States recorded 6.6 million new jobs.

That gives Biden the strongest first year of job gains of any president since the government began collecting data in 1939.

The President added that the news "comes alongside the largest drop in the unemployment rate in a single year on record ... and the strongest economic growth this country has seen in nearly 40 years," pointing to the success of his American Rescue Plan and passage of the Bipartisan Infrastructure Law.

The monthly Employment Situation Summary, otherwise known as the jobs report, is based on the Current Populations Survey of households and the Current Employment Statistics Survey of employers. It estimates the number of people employed and unemployed in the economy and the number of hours they worked in the previous month. The report is released by the Bureau of Labor Statistics (BLS) at 8:30am ET on the first Friday of every month.

The jobs report is used by investment firms, corporations and investors to gauge the overall health of the economy.

The bond markets look at the report for what it might indicate about inflation and interest rates, and the currency markets look at the report for signs that might affect the value of the US dollar.

As the numbers often get significant revisions long after their initial release, the report is less a predictive than a barometer -- providing a snapshot of the health of the economy and whether it is working for ordinary Americans.

Analysts anticipated a less robust jobs report given the record-setting spike in coronavirus cases in January that kept millions of workers at home and upended many parts of the economy, closing schools and businesses.

The unemployment rate, however, has dropped precipitously since the worst of the pandemic, and wages rose a rapid 5.7% over the last year.

It is good news for the administration and a public that, stressed about their economic prospects under a seemingly endless pandemic and rapid inflation, has shown waning confidence in Biden's handling of the economy.

A January 10-17 survey of US adults by Pew Research Center found that just 44% of participants were confident in Biden's ability to make good decisions about economic policy, down from 56% in March of 2021.

“In the big picture, it’s a very encouraging report. People returning to the workforce is what you wanted to see, and the gains were pretty widespread across different groups. The most important thing is people want to get back to work, and they’re trying to get back to work.” - MetLife Investment Management Chief Market Strategist Drew Matus, Washington Post 2/4/22

President Biden, characteristically, credited the “extraordinary resilience and grit of the American people."

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Kimberly Scott

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Sources: Department of Labor, Investopedia, New York Times, Washington Post, Pew

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