Explaining Southern California's economy

CHART: January jobs report: US adds 157,000 jobs, unemployment rate goes to 7.9 percent

Walmart hiring

KPCC

Daniel Vera, assistant manager at the Altadena Walmart Neighborhood Market, greets job seekers at the "Hiring Altadena" event.

The Labor Department released its January jobs report Friday. The country added 157,000 jobs for the month and the unemployment rate went to 7.9 percent from December's 7.8 percent.

In the words of the Bureau of Labor Statistics' economists, the situation was "essentially unchanged" from last month.

The 157,000 number was lower than what payrolls processor ADP reported earlier as well as what economists surveyed by Bloomberg were expecting. However, it was in line with the pace of job growth in the U.S. over the past 12 months.

The economy can tread water with sub-200,000-per-month job growth. To really drive the unemployment rate down to what economists call "full employment" — an unemployment rate of around 5 percent — the economy would need to add 300,000-to-400,000 new jobs each month.

On the plus side, both the November and December numbers were revised up – November increased substantially, to 247,000 new jobs added, from the previously reported 161,000.

One bright spot in an otherwise grimly routine report was construction:

In January, employment in construction increased by 28,000. Nearly all of the job growth occurred in specialty trade contractors (+26,000), with the gain about equally split between residential and nonresidential specialty trade contractors. Since reaching a low in January 2011, construction employment has grown by 296,000, with one-third of the gain occurring in the last 4 months.

But:

January 2013 level of construction employment remained about 2 million below its previous peak level in April 2006.

So good news and not-so-good news there, but construction has been surging in recent months, a sign that the housing market is generally improving. In fact, only retail trade did better than construction in January, in terms of jobs added. For California and specifically Southern California, where a housing recovery could be the engine that improves the overall economic outlook, that's a definite positive takeaway from Friday's jobs report.

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