MNI REALITY CHECK: US Jan Jobs Seen Recovering; SA Boost

U.S. job growth likely rebounded in January after falling in December for the first time since the early days of the pandemic, figures due Friday should show, though seasonal adjustment factors are likely to make last month's job creation seem stronger than it actually was, recruiters and industry experts told MNI.

December's decline of 140,000 jobs won't be repeated in January, said Julia Pollak, a labor economist with online job marketplace ZipRecruiter, but added that negative job growth could be a possibility in the coming months as the labor market faces a bumpy road to full recovery.

"I don't think it's a one-off thing, but I do think it is a temporary thing ," she said. "It also reflects the fact that the job market is now more dependent on the weather than at any other point in American history."

Jobs lost in January were mostly concentrated in places like hotels and casinos, which were hampered by falling outdoor temperatures and indoor restrictions, she said.

Pollak said overall employer optimism still surged through the month, with firms reactivating accounts on ZipRecruiter and posting new job opportunities at a rate much higher than anticipated. But job seeker optimism has not risen to the same degree, she said, which is uncommon for January fresh starts.

SEASONAL ADJUSTMENT BUMP

"We're not through the hard patch just yet, and we're likely to see a fairly weak number in January," Pollak said, though that number is still expected to be positive. Seasonal adjustment factors are likely to make January's numbers look even better than they actually are, she added, estimating a monthly gain of 200,000 jobs.

Typically, January employment dips by about 3 million on a non-seasonally-adjusted basis as temporary seasonal workers get laid off following the holidays. That probably won't happen this year, she said, because there were fewer people in those jobs to begin with, but with those same adjustment factors in place, "this report could end up looking even rosier than it really is."

REMOTE WORK HERE TO STAY

Even as Covid-19 infection rates fell slightly in the U.S. and tens of millions of vaccines were distributed, hiring for exclusively remote work was still strong through January, with around 9% of job postings on ZipRecruiter offering remote work, Pollak said. Still, 68% of job seekers said they were primarily looking for remote opportunities, making it difficult in some cases for firms to attract workers to corporate offices or factory floors.

Work-from-anywhere positions are likely to stick around for quite some time, said Tom Gimbel, founder and CEO of the LaSalle Network in Chicago, and are even likely to remain popular post-pandemic.

That's evidenced by a slew of remote full-time jobs being filled by people who may be hundreds of miles away from where the position is actually based.

"Because of remote work, you can open up the parameters, where you're looking for people geographically," he said, "you can do it anywhere."

Gimbel said some companies may only extend remote offers to job seekers who are willing to relocate in a year or so, assuming the pandemic is "eradicated" by then.

MANUFACTURING WAGES UP

Employment gains in the manufacturing sector likely softened in January, said Chad Moutray, chief economist at the National Association of Manufacturers, expecting a gain of 20,000 manufacturing jobs in January after a 38,000 increase in December. Noting manufacturing jobs were still down around 500,000 since April, "a lot of our manufacturing companies that they're having trouble finding talent," he said, with many having to raise wages to entice workers.

Still, manufacturers are optimistic about future job growth in the near-term, Moutray said, forecasting a gain of between 200,000 and 250,000 new jobs this year, just under the 264,000 jobs created in 2018 that was the most this century.

"You definitely get a sense that over the last few months manufacturers are more optimistic about the next six months," he said.

Total nonfarm payrolls are expected to increase 100,000 in January, according to the Bloomberg consensus, up from December's negative growth but still moderating from larger gains seen in the October and November. The unemployment rate should hold steady at 6.7%.