Labor Secretary Marty Walsh on US job growth soaring past expectations: 'Very transparent number'

Labor Secretary Walsh on US job growth soaring past expectations

Labor Secretary Marty Walsh argues that payrolls in January rising by 467,000 is a ‘very transparent number’ even though the benchmark had been revised, which he acknowledged is ‘part of’ the reason why job growth blew past expectations.

Labor Secretary Marty Walsh argued on Friday, shortly after the department’s monthly payroll report was released, that jobs in January rising by 467,000 is a "very transparent number" even though the benchmark had been revised, which he acknowledged is "part of" the reason why growth blew past expectations.

Speaking on "Varney & Co.," Walsh stressed the Labor Department "didn’t change the way we collect our data."

"BLS, the Bureau of Labor Statistics, is a gold standard for bringing in these statistics," he told host Stuart Varney. "It’s been used in this country for decades. Certainly, this is a very transparent number."

The Labor Department revealed in its monthly payroll report released Friday that payrolls in January easily topped the 150,000 jobs gain forecast by Refinitiv economists and that the gains spread across all industries. The unemployment rate, which is calculated based on a separate survey, ticked up slightly to 4%.

The surprise gain comes after the Biden administration spent the week publicly bracing for a dismal report that officials warned could show the economy actually lost jobs last month amid a surge of omicron cases. But COVID-19 cases have eased in recent weeks, with the seven-day moving average falling to 596,860, down 20% from the prior week, according to the Centers for Disease Control and Prevention. 

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Economists expect job growth to climb even higher in coming months as omicron cases continue to fall.

Businesses are eager to bring on new employees and are raising wages in order to attract workers as they confront a labor shortage. There are roughly 10.9 million open jobs – a near-record – while the pace of layoffs has moderated. 

Friday's payroll report also painted a brighter employment picture in 2021, with major upward revisions to the jobs figure in December (510,000, up from the initially reported 199,000) and November (647,000, up from the initially reported 249,000).

What contributed to US job growth soaring past expectations?

FOX Business’ Edward Lawrence reports that the Bureau of Labor Statistics revised their benchmark month to March 2021, which changed the number of jobs added for every month after that and also boosted the number for January.

FOX Business’ Edward Lawrence reported the Bureau of Labor Statistics revised their benchmark month to March, which changed the number of jobs added for every month after that and also boosted the number for January.

Lawrence reported, citing a BLS spokesperson, that the benchmark month was revised based on the "actual employment count" and that the bureau also revised seasonal adjustment factors, which changed the data as well.

Lawrence also noted, citing the BLS, that the bureau has been doing this type of revision at the same time of the year for "a very long time," specifically more than 10 years. 

He added that a BLS spokesperson said the issue is that the computer model has trouble with big external events, like a pandemic, and that is why the agency goes back to the "actual employment count" to make revisions for the previous year.

US JOB GROWTH SOARS PAST EXPECTATIONS WITH 467,000 ADDED, SHAKING OFF OMICRON SURGE

Part of the broad increase in payrolls likely reflected low layoffs after the holiday hiring season because of labor shortages, Reuters reported, noting that actual employment in January usually drops, but the model used by the government to strip out seasonal fluctuations from the data accounts for this by adding about 3 million jobs to produce the seasonally-adjusted figure.

The government also reported 374,000 more jobs were created in the 12 months through March 2021 than previously reported, which signaled labor market resilience could change expectations that economic growth would slow significantly in the first quarter following strong growth the quarter before, according to Reuters.

Walsh stressed Friday payrolls in January rising by 467,000 "is very good," noting "there was some concern as the month went on in the previous month because of the omicron variant."

He also stressed the U.S. is "in a very different position than we were in March, April, May [and] June of 2020 living within a pandemic."

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"So we’re seeing businesses, we’re seeing employees, we’re seeing people learning to live and move on with their life, quite honestly, under the virus," he continued. 

Walsh also pointed out the year revision of 700,000 jobts "jumped out at me."

"I asked the bureau, ‘Why such a big revision?’ And what they said to me was statistically that’s what we’ve seen over the last 10 years," he said. "So there’s no statistically different adjustment that we haven’t seen in previous years."

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According to the BLS, the unemployment rate was only .5% higher in January compared to before the onset of the coronavirus pandemic, noting the unemployment rate was 3.5% in February 2020 compared to 4% in January of this year. 

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FOX Business’ Edward Lawrence and Megan Henney contributed to this report. 

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