We estimate based on real-time income tax withholdings that the U.S. economy added 135,000 to 155,000 jobs in January, down slightly from 145,000 to 165,000 jobs in December.
For the second consecutive month, we are citing a range rather than a single figure because the impact of year-end bonuses makes it much tougher than usual to estimate employment change. Many employers shifted bonuses that normally would be paid in January and February into December due to tax increases that took effect on January 1. According to our favorite official Washington economist, some of the withholdings on bonuses paid out by December 31 were transmitted to the Treasury as late as the middle of January, so year-over-year comparisons in January are as skewed as they were in December. We adjusted the raw withholdings data to account for a significant degree of bonus shifting.
In the past three months, we calculate that the economy added an average of 167,000 jobs per month. This level of job growth will reduce the unemployment rate very gradually (the U-3 unemployment rate was unchanged at 7.8% in December, while the U-6 unemployment rate was unchanged at 14.4%).
Source: TrimTabs Investment Research and Bureau of Labor Statistics.
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