One day after the unofficial ADP jobs report indicated hiring was slowing after its January jobs report reflecting just 106,000 jobs created in January, the federal Bureau of Labor Statistics released the official jobs report showing an astonishing 517,000 new jobs created in January and pushing the US unemployment rate down to a new all-time low of 3.4%.
The nearly 400% additional jobs created in the will undoubtedly cause havoc in the markets given early reports from prognosticators consistently put the level at under 200,000, one of various factors that led to a 1% drop in the Dow average after the opening bell on Wednesday.
Job growth was steady across the board, with a 0.3% monthly increase in wages, which have risen 4.4% in the last year. The two previous monthly reports were also revised upward by 70,000 jobs.
A note of clarification: I stated that this is an “all-time low,” and I stand by that statement. However, officially reported unemployment rates were lower in the 1950s because of some limits on what the “workforce” was designated to be at that time–that is, primarily male. Women were part of the workforce, but the unemployment rate measures the number of people without a job who want a paid job outside the house; in the 1950s, most women couldn’t get a job outside the house even if they wanted, so the fact that women did seek jobs drove unemployment numbers of the era down. Also, there was a change made to how the unemployment rate was calculated in the 1980s, shifting how uniformed members of the military were included in the calculation so Reagan could report higher employment and lower unemployment.