What Is the Unemployment Rate and Other Jobs Report Findings

The current unemployment rate is 3.4%.
Anna Helhoski
By Anna Helhoski 
Edited by Laura McMullen

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Updated Feb. 3, 2023, 8:00 a.m. PT to reflect the most recent Bureau of Labor Statistics jobs report.

Unemployment decreased again in January and now sits at a 54-year low, according to the jobs report released on Feb. 3 by the Bureau of Labor Statistics.

Job gains increased sharply compared with the previous months and wage growth slowed.

How many jobs were added in January?

The economy added 517,000 new jobs in January, a stunning increase in gains compared with the preceding three months: December (223,000), November (256,000) and October (263,000).

What is the current unemployment rate?

The current unemployment rate is 3.4%. December's unemployment rate declined compared with the previous few months. The unemployment rate is the lowest since May 1969. The number of unemployed declined by 28,000 compared with December.

Is unemployment rising or falling?

The unemployment rate has remained low and stable, fluctuating between 3.5% and 3.7% since March 2022. It fell slightly from December to January.  

How to calculate the unemployment rate

The unemployment rate is calculated by dividing the number of unemployed people by the number of people in the labor force. (The labor force is considered the sum of those who are currently working or looking for work.) The result is then multiplied by 100 to get a percentage:

Number of unemployed people / Labor force x 100 = X%, which is the unemployment rate

What is the labor force participation rate?

The labor force participation rate barely budged since last month: 62.4% in January December compared with 62.3% in December. The labor force participation rate is the percentage of the population that is working or looking for work.

The rate is calculated as the labor force divided by the total population that’s eligible to work. (The Bureau of Labor Statistics defines the total population that’s eligible to work as the “civilian noninstitutional population,” which refers to people ages 16 and older who are not in military service or incarcerated.) The result is multiplied by 100 to get a percentage:

Labor force / Civilian noninstitutional population x 100 = X%, which is the labor force participation rate

Since October 2002, the labor force participation rate was lowest in April 2020 (60.1%) and highest in June 2003 (66.5%), according to BLS data.

How is the job market right now?

Two key indicators — job openings and quit rate — show that job seekers still have opportunities across fields. There were also few changes in layoffs reported among all employment sectors, with the rate changing little from previous months.

What does the Job Openings and Labor Turnover Summary report show?

The latest Job Openings and Labor Turnover Summary, or JOLTS, showed job openings remained strong, rising to 11.0 million in December — a slight increase from 10.5 million job openings reported for November.

The largest increase in job openings in December were found in accommodation and food services; retail trade and construction. In the previous month, the professional and business services, and in nondurable goods manufacturing had the largest number of job openings. The most significant decreases were in information.

Despite some recent high profile layoffs in tech and media industries, the rate of layoffs remained relatively unchanged from November to December, according to the JOLTS report.

What is the quit rate?

The JOLTS report also showed the quit rate in December remained steady at 2.7% (similar to the previous four months), which economists say is a key factor in the health of employment prospects since quitting shows that workers feel safe making a job switch.

Compared with the previous month, December quit rates increased most dramatically in other services. Workers in these sectors may be moving within the sector or outside it entirely. Quit rates declined in transportation, warehousing and utilities.

Are wages increasing?

Wages are starting to moderate. The  Employment Cost Index measures wage and salary growth. The Jan. 31 report shows the index for labor costs increased by 1.0% in the final quarter of 2022 compared with 1.2% in the previous quarter. The costs in the fourth quarter when measured year-over-year show an increase of 5.1%; the previous quarter showed a 5.2% increase year-over-year.

Will unemployment rise?

With a labor market this tight it’s hard to see it slackening anytime soon. Even so, multiple forecasts are predicting job losses in 2023. In September, the Federal Reserve projected unemployment would reach 4.4% next year. Bank of America, meanwhile, projects an even higher unemployment rate of 5.5%.

The Federal Reserve hiked interest rates eight times since March 2022 in an effort to bring down inflation, which is expected to eventually lead to a higher unemployment rate. Fed. Chair Jerome Powell said after the latest hike on Feb. 1 that “a couple more” increases would be prudent. 

Jobs report: What is employment like in your field?

Workers wondering if it’s time to make a move in their jobs might want to consider what’s happening with employment in their industry.

Here’s what you need to know, based on Bureau of Labor Statistics data, seasonally adjusted, over time:

Construction 

Employed in January: 7,884,000

Employed in December: 7,859,000

Employed in February 2020: 7,646,000

% change since December: +0.3%

% change since February 2020: +3.1%

Education services

Employed in January: 3,880,500

Employed in December: 3,854,700 

Employed in February 2020: 3,838,100 

% change since December: +0.7%

% change since February 2020: +1%

Financial activities

Employed in January: 9,114,000

Employed in December: 9,108,000

Employed in February 2020: 8,850,000

% change since December: +0.1%

% change since February 2020: +3%

Government 

Employed in January: 22,389,000

Employed in December: 22,315,000

Employed in February 2020: 22,775,000

% change since December: +0.33%

% change since February 2020: -1.7%

Health care and social assistance

Employed in January: 21,056,600

Employed in December: 20,977,400

Employed in February 2020: 20,753,300

% change since December: +0.4%

% change since February 2020: +1.5%

Information

Employed in January: 3,119,000

Employed in December: 3,124,000

Employed in February 2020: 2,898,000

% change since December: -0.7%

% change since February 2020: +7.6%

Leisure and hospitality

Employed in January: 16,450,000

Employed in December: 16,322,000

Employed in February 2020: 16,873,000

% change since December: +0.8%

% change since February 2020: -2.5%

Manufacturing

Employed in January: 12,999,000

Employed in December: 12,980,000

Employed in February 2020: 12,861,000

% change since December: +0.2%

% change since February 2020: +1.1%

Mining and logging

Employed in January: 631,000

Employed in December: 629,000

Employed in February 2020: 717,000

% change since December: +0.3%

% change since February 2020: -12%

Professional and business services 

Employed in January: 22,912,000

Employed in December: 22,830,000

Employed in February 2020: 21,569,000

% change since December: +0.4%

% change since February 2020: +6.2%

Retail trade

Employed in January: 15,482,600

Employed in December: 15,452,500

Employed in February 2020: 15,659,400

% change since December: +0.2%

% change since February 2020: -1.1%

Transportation and warehousing 

Employed in January: 6,740,500

Employed in December: 6,717,600

Employed in February 2020: 5,681,700

% change since December: +0.3%

% change since February 2020: +18.6%

Wholesale trade

Employed in January: 6,041,000

Employed in December: 6,029,700

Employed in February 2020: 5,936,200

% change since December: +0.2%

% change since February 2020: +1.8%

When is the next jobs report?

The next jobs report will show data for February and will be released on March 10.