January job numbers show a different picture of 2021

New data from the Bureau of Labor Statistics (BLS) presents a different view of 2021’s job market than originally reported.

Every January, BLS adjusts the previous year’s employment statistics to make them more precise. The changes are based on more detailed surveys conducted every March.

Initial BLS data showed peaks and valleys in the monthly job reports. The January update revealed a job market seemingly unaffected by the Delta and Omicron variants, gaining jobs at a steady pace throughout the year.

How much did the monthly job numbers change after BLS update?

Last summer, the monthly BLS employment data showed new job gains peaking in July, with more than a million new jobs reported.

Then jobs declined in the winter.  December’s report showed a quarter of the new jobs of the summer peak. The updated data from the BLS showed only April, May, and September had fewer than half a million new jobs in a month. The peaks were lower too, with February and March the only months exceeding 700,000 new jobs.

What’s different about the latest BLS data?

The bureau made three changes to its employment data with the January job report. It updated how it seasonally adjusts the data to account for employment shifts like holiday hiring. It changed the benchmarks for employment data.  And it started using 2020 census population data.

At the start of a new year, the BLS sets its employment data benchmark to the Quarterly Census of Employment and Wages. This census counts jobs for companies participating in the unemployment insurance tax system. The new benchmarks caused changes in the data from April 2020 that isn’t seasonally adjusted. The changes also affect seasonally adjusted data as far back as January 2017.

The BLS adjusts its data to account for seasonal patterns. Since most years follow the same employment pattern, these adjustments make it easier to see real changes in the job market. But the pandemic caused unprecedented changes to those normal patterns, making it difficult to make accurate monthly adjustments. With more detailed survey data, the BLS thinks its models will be better at distinguishing between a seasonal change and a broader economic trend.

How did the adjustments affect other key employment numbers?

While the labor force participation rate increased 0.3 percentage points in January, the BLS said it was due entirely to the change in its population estimates. The bureau provides a comparison for December 2021 to January 2022 based on the new population numbers, but it doesn’t provide something similar for the other months in 2021.

The new population estimates showed an increase in the 35–64 age group, a group that is more likely to be in the labor force, and a decrease in the 65 and older population, which is less likely to be working.

The BLS said the population adjustments didn’t affect the unemployment rate for the last two months. Since the population estimates changes weren’t made for 2021, the labor force participation rate wasn’t affected either.

What did the January jobs report say and what does it mean for 2022?

The January employment report showed 467,000 new jobs for the month.

While adjusted BLS data showed minimal pandemic impact on the job market, the Omicron variant did show up in the January data in another way. Six million people were “unable to work because their employer closed or lost business due to the pandemic.” That’s almost double what was reported in December.

Employment is not back to pre-pandemic levels. About 687,000 more people were unemployed as of January 2022 compared to the same month in 2020. The 4% unemployment rate is 0.5 percentage points higher than January 2020. US total employment is now at 149.6 million, 1.6% lower than January two years ago.

While the new data gives some insight into recent changes in the job market, the BLS annual adjustments show that these are far from precise measurements. The bureau also adjusts the monthly data throughout the year as it collects more information.

In the future, USAFacts will focus on the bigger economic picture instead of monthly job data releases. Check the COVID-19 Impact and Recovery Hub for the latest government figures.