Strong Job Gains in January

Despite the omicron surge, the U.S. job market experienced solid gains. Total nonfarm payroll employment increased by 467,000 in January, and the unemployment rate ticked up slightly to 4.0%. Additionally, job gains in December and November were much stronger than initially estimated, according to revisions of the establishment survey data.

Construction industry employment (both residential and non-residential) totaled 7.5 million, with 5,000 construction jobs shed in January. Residential construction gained 4,400 jobs, while non-residential construction employment lost 9,000 for the month. Residential construction employment currently exceeds its level in February 2020, while 67% of nonresidential construction jobs lost in March and April have now been recovered.

Total nonfarm payroll employment increased by 467,000 in January, following a gain of 510,000 in December, as reported in the Employment Situation Summary. Total nonfarm employment data from January to December 2021 have been revised because of the annual benchmarking process and updated models. Job gains for November and December were revised upward. The November estimate was revised up by 398,000 from +249,000 to +647,000, while the December increase was revised up by 311,000 to +510,000. Overall, the 2021 over-the-year change is 217,000 higher than previously reported.

In 2021, about 6.7 million jobs were created and monthly employment growth has averaged 555,000 per month. As of January 2022, total nonfarm employment is still 2.9 million lower than its pre-pandemic level in February 2020 level.

Meanwhile, the unemployment rate rose slightly by 0.1 percentage point to 4.0% in January. It was 10.7 percentage points lower than its recent high of 14.7% in April 2020 and 0.5 percentage points higher than the rate in February 2020. Both the number of persons unemployed (+194,000) and the number of persons employed (+1,199,000) increased in January.

The labor force participation rate, the proportion of the population either looking for a job or already with a job, increased 0.3 percentage pints to 62.2% in January, showing more people are reentering the labor force. It is the highest level since March 2020.

Employment in leisure and hospitality, professional and business services, retail trade, and transportation and warehousing continued to increase, while employment in mining and logging and construction declined over the month.

Employment in the overall construction sector declined by 5,000 in January, after six consecutive monthly increases. Residential construction rose by 4,400 jobs in January, while nonresidential construction employment lost 9,000 jobs.

Residential construction employment now stands at 3.1 million in January, broken down as 883,000 builders and 2.2 million residential specialty trade contractors. The 6-month moving average of job gains for residential construction was 6,417 a month. Over the last 12 months, home builders and remodelers added 88,000 jobs on a net basis. Since the low point following the Great Recession, residential construction has gained 1,104,200 positions.

In January, the unemployment rate for construction workers rose by 0.7 percentage points to 5.6% on a seasonally adjusted basis. The unemployment rate for construction workers has been trending lower, after reaching 14.2% in April 2020, due to the housing demand impact of the COVID-19 pandemic.

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