THE EMPLOYMENT SITUATION: JANUARY 2009

Nonfarm payroll employment fell sharply in January (-598,000) and the unemployment rate rose from
7.2 to 7.6 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Payroll
employment has declined by 3.6 million since the start of the recession in December 2007; about one-half of
this decline occurred in the past 3 months. In January, job losses were large and widespread across nearly all
major industry sectors.

Establishment and Household Data Changes
The establishment survey data in this release have been revised as a result of the annual
benchmarking process and the updating of seasonal adjustment factors. See the note beginning
on page 6 for more information on the revisions.
In addition, household survey data for January 2009 reflect updated population estimates.
See the note on page 7 for more information. Also, January 2009 industry data shown in table
A-11 of this release have been converted to the 2007 Census Industry Classification System.
Historical data have not been revised.

Unemployment (Household Survey Data)
Both the number of unemployed persons (11.6 million) and the unemployment rate (7.6 percent) rose in
January. Over the past 12 months, the number of unemployed persons has increased by 4.1 million and the
unemployment rate has risen by 2.7 percentage points. (See table A-1.)
The unemployment rate continued to trend upward in January for adult men (7.6 percent), adult women
(6.2 percent), whites (6.9 percent), blacks (12.6 percent), and Hispanics (9.7 percent). The jobless rate for
teenagers was unchanged at 20.8 percent. The unemployment rate for Asians was 6.2 percent in January, not
seasonally adjusted. (See tables A-1, A-2, and A-3.)
Among the unemployed, the number of job losers and persons who completed temporary jobs increased to
7.0 million in January. This measure has grown by 3.2 million during the last 12 months. (See table A-8.)
The number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 2.6 million
in January. Over the past 12 months, the number of long-term unemployed was up by 1.3 million. The
number of persons unemployed less than 5 weeks rose to 3.7 million in January. (See table A-9.)
Total Employment and the Labor Force (Household Survey Data)
The civilian labor force participation rate, at 65.5 percent in January, has edged down in recent months.
The employment-population ratio declined by 0.5 percentage point to 60.5 percent over the month, and by 2.4
percentage points over the year. (See table A-1.)
The number of persons who worked part time for economic reasons (sometimes referred to as involuntary
part-time workers) was essentially unchanged in January at 7.8 million; however, this measure was up by 3.1
million over the past 12 months. Included in this category are persons who would like to work full time but
were working part time because their hours had been cut back or because they were unable to find full-time
jobs. (See table A-5.)
Persons Not in the Labor Force (Household Survey Data)
About 2.1 million persons (not seasonally adjusted) were marginally attached to the labor force in January,
about 400,000 more than 12 months earlier. These individuals wanted and were available for work and had
looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not
searched for work in the 4 weeks preceding the survey. Among the marginally attached, there were 734,000
discouraged workers in January, up by about 270,000 from a year earlier. Discouraged workers are persons not
currently looking for work because they believe no jobs are available for them. The other 1.4 million persons
marginally attached to the labor force in January had not searched for work in the 4 weeks preceding the survey
for reasons such as school attendance or family responsibilities. (See table A-13.)
Industry Payroll Employment (Establishment Survey Data)
Total nonfarm payroll employment fell sharply (-598,000) in January. Since the recession began in
December 2007, 3.6 million jobs have been lost, with about half of the decrease occurring in the last 3 months.
In January, employment declined in nearly all major industries, while health care and private education added
jobs. (See table B-1.)
4
Manufacturing employment fell by 207,000 in January, the largest 1-month decline since October 1982.
In January, durable goods manufacturing lost 157,000 jobs, with notable decreases in fabricated metal products
(-37,000), motor vehicles and parts (-31,000), and machinery (-22,000). Employment in nondurable goods
manufacturing declined by 50,000 over the month.
Construction lost 111,000 jobs in January. Employment in the industry has fallen by about 1.0 million
since peaking in January 2007. Employment fell across most component industries over the month.
The temporary help industry lost 76,000 jobs in January. Since its recent peak in December 2006, temporary
help employment has declined by 695,000. Professional and technical services lost 29,000 jobs in
January.
Retail trade employment fell by 45,000 in January and by 592,000 since a peak in November 2007. In
January, employment declined in automobile dealerships (-14,000), building material and garden supply stores
(-10,000), department stores (-9,000), and furniture and home furnishing stores (-7,000). Over the month,
wholesale trade employment fell by 31,000.
Transportation and warehousing lost 44,000 jobs in January and 202,000 since the start of the recession.
Most of the decline occurred over the last 5 months. In January, employment fell in truck transportation
(-25,000), support activities for transportation (-9,000), and couriers and messengers (-4,000).
Employment in financial activities declined by 42,000 over the month and by 388,000 since a peak in
December 2006. In January, job losses occurred in securities, commodity contracts, and investments (-15,000)
and in credit intermediation (-10,000).
Health care employment continued to trend up in January with a gain of 19,000. Employment gains in the
industry averaged 30,000 a month in 2008. Employment in private education rose by 33,000 over the month.
The change in total nonfarm employment for November was revised from -584,000 to -597,000, and the
change for December was revised from -524,000 to -577,000. Monthly revisions result from additional sample
reports and the monthly recalculation of seasonal factors. This month, the annual benchmarking process also
contributed to these revisions.
Weekly Hours (Establishment Survey Data)
In January, the average workweek for production and nonsupervisory workers on private nonfarm payrolls
remained at 33.3 hours, seasonally adjusted. Both the manufacturing workweek and factory overtime decreased
by 0.1 hour over the month, to 39.8 and 2.9 hours, respectively. (See table B-2.)
The index of aggregate weekly hours of production and nonsupervisory workers on nonfarm payrolls fell
by 0.7 percent in January. The manufacturing index declined by 2.1 percent over the month. (See table B-5.)
Hourly and Weekly Earnings (Establishment Survey Data)
In January, average hourly earnings of production and nonsupervisory workers on private nonfarm payrolls
rose by 5 cents, or 0.3 percent, seasonally adjusted. This followed gains of 7 cents in December and 6 cents in
5
November. Over the past 12 months, average hourly earnings increased by 3.9 percent, and average weekly
earnings rose by 2.7 percent. (See table B-3.)
______________________________
The Employment Situation for February 2009 is scheduled to be released on Friday, March 6,
at 8:30 A.M. (EST).
6
Revisions to Establishment Survey Data
In accordance with annual practice, the establishment survey data have been revised to reflect comprehensive
universe counts of payroll jobs, or benchmarks. These counts are derived principally from unemployment
insurance tax records compiled by the Quarterly Census of Employment and Wages program for March
2008. As a result of the benchmark process, all not seasonally adjusted data series were subject to revision from
April 2007 forward, the time period since the last benchmark was established. In addition, with this release, the
seasonally adjusted establishment survey data from January 2004 forward were subject to revision due to the
introduction of updated seasonal adjustment factors.
Table B presents revised total nonfarm employment data on a seasonally adjusted basis for January through
December 2008. The revised data for April 2008 forward incorporate the effect of applying the rate of change
measured by the sample to the new benchmark level, as well as updated net business birth/death model adjustments
and new seasonal adjustment factors. The November and December 2008 revisions also reflect the
routine incorporation of additional sample receipts into the November final and December second preliminary
estimates. The total nonfarm employment level for March 2008 was revised downward by 89,000 (17,000 on a
seasonally adjusted basis). The previously published level for December 2008 was revised downward by
172,000 (311,000 on a seasonally adjusted basis).
An article that discusses the benchmark and post-benchmark revisions, as well as all revised historical
Current Employment Statistics (CES) data, can be accessed through the CES homepage at
http://www.bls.gov/ces/. Information on the revisions released today also may be obtained by calling
(202) 691-6555.
Table B. Revisions in total nonfarm employment, January-December 2008,
seasonally adjusted
(In thousands)
2008
January ....................... 138,002 138,080 -76 -72 4
February ..................... 137,919 137,936 -83 -144 -61
March ......................... 137,831 137,814 -88 -122 -34
April ........................... 137,764 137,654 -67 -160 -93
May ............................ 137,717 137,517 -47 -137 -90
June ............................ 137,617 137,356 -100 -161 -61
July ............................. 137,550 137,228 -67 -128 -61
August ........................ 137,423 137,053 -127 -175 -48
September ................... 137,020 136,732 -403 -321 82
October ....................... 136,597 136,352 -423 -380 43
November ................... 136,013 135,755 -584 -597 -13
December p ……...… 135,489 135,178 -524 -577 -53
p = preliminary.
Levels Over-the-month changes
Year and month As
previously
published
As revised
As
previously
published
As revised Difference
7
Adjustments to Population Estimates for the Household Survey
Effective with data for January 2009, updated population estimates have been used in the household survey.
Population estimates for the household survey are developed by the U.S. Census Bureau. Each year, the Census
Bureau updates the estimates to reflect new information and assumptions about the growth of the population
during the decade. The change in population reflected in the new estimates results primarily from adjustments
for net international migration, updated vital statistics information, and some methodological changes in the
estimation process.
In accordance with our usual practice, BLS will not revise the official household survey estimates for
December 2008 and earlier months. To show the impact of the population adjustment, however, differences in
selected December 2008 labor force series based on the old and new population estimates are shown in table C.
The adjustment decreased the estimated size of the civilian noninstitutional population in December by 483,000,
the civilian labor force by 449,000, and employment by 407,000; the new population estimates had a negligible
impact on unemployment rates and other percentage estimates. Data users are cautioned that these annual
population adjustments affect the comparability of household data series over time. Estimates of large levels,
such as total labor force and employment are impacted most. Table D shows the effect of the introduction of
new population estimates on the changes in selected labor force measures between December 2008 and January
2009. More detailed information on the population adjustments and their effect on national labor force
estimates are available at http://www.bls.gov/cps/cps09adj.pdf.
Table C. Effect of the updated population controls on December 2008 estimates by sex, race, and
Hispanic or Latino ethnicity, not seasonally adjusted
(Numbers in thousands)
Category Total Men White Asian
Civilian noninstitutional population … -483 -295 -188 -242 -43 -170 -319
Civilian labor force ………………… -449 -289 -160 -267 -38 -121 -264
Employed ………………………… -407 -260 -146 -239 -33 -116 -238
Unemployed ……………………… -42 -28 -14 -28 -5 -6 -27
Unemployment rate …………… .0 .0 .0 .0 .0 .0 .0
Women
Black or
African
American
Hispanic
or Latino
ethnicity
NOTE: Detail for men and women may not sum to totals because of rounding. Estimates for the above race
groups (white, black or African American, and Asian) do not sum to totals because data are not presented for all
races. Persons whose ethnicity is identified as Hispanic or Latino may be of any race.
8
Table D. December 2008-January 2009 changes in selected labor force measures, with
adjustments for population control effects
(Numbers in thousands)
Category
TOTAL
Civilian noninstitutional population ……… -296 -483 187
Civilian labor force ……………………… -731 -449 -282
Participation rate ……………………… -.2 -.1 -.1
Employed ……………………………… -1,239 -407 -832
Employment-population ratio ………… -.5 .0 -.5
Unemployed …………………………… 508 -42 550
Unemployment rate …………………… .4 .0 .4
2009 population
control effect
Dec.-Jan. change,
as published
Dec.-Jan. change,
after removing
the population
control effect 1
1 This Dec.-Jan. change is calculated by subtracting the population control effect from the published overthe-
month change.
9
Frequently Asked Questions about Employment and Unemployment Estimates
Why are there two monthly measures of employment?
The household survey and establishment survey both produce sample-based estimates of employment
and both have strengths and limitations. The establishment survey employment series has a
smaller margin of error on the measurement of month-to-month change than the household survey
because of its much larger sample size. An over-the-month employment change of 107,000 is statistically
significant in the establishment survey, while the threshold for a statistically significant change in
the household survey is about 400,000. However, the household survey has a more expansive scope
than the establishment survey because it includes the self-employed, unpaid family workers, agricultural
workers, and private household workers, who are excluded by the establishment survey. The
household survey also provides estimates of employment for demographic groups.
Are undocumented immigrants counted in the surveys?
Neither the establishment nor household survey is designed to identify the legal status of workers.
Thus, while it is likely that both surveys include at least some undocumented immigrants, it is not
possible to determine how many are counted in either survey. The household survey does include
questions about whether respondents were born outside the United States. Data from these questions
show that foreign-born workers accounted for 15.7 percent of the labor force in 2007 and 47.7 percent
of the net increase in the labor force from 2000 to 2007.
Why does the establishment survey have revisions?
The establishment survey revises published estimates to improve its data series by incorporating
additional information that was not available at the time of the initial publication of the estimates.
The establishment survey revises its initial monthly estimates twice, in the immediately succeeding
2 months, to incorporate additional sample receipts from respondents in the survey and recalculated
seasonal adjustment factors. For more information on the monthly revisions, please visit
http://www.bls.gov/ces/cesrevinfo.htm.
On an annual basis, the establishment survey incorporates a benchmark revision that re-anchors
estimates to nearly complete employment counts available from unemployment insurance tax records.
The benchmark helps to control for sampling and modeling errors in the estimates. For more information
on the annual benchmark revision, please visit http://www.bls.gov/web/cesbmart.htm.
Does the establishment survey sample include small firms?
Yes; about 40 percent of the establishment survey sample is comprised of business establishments
with fewer than 20 employees. The establishment survey sample is designed to maximize the reliability
of the total nonfarm employment estimate; firms from all size classes and industries are appropriately
sampled to achieve that goal.
Does the establishment survey account for employment from new businesses?
Yes; monthly establishment survey estimates include an adjustment to account for the net employment
change generated by business births and deaths. The adjustment comes from an econometric
model that forecasts the monthly net jobs impact of business births and deaths based on the actual past
10
values of the net impact that can be observed with a lag from the Quarterly Census of Employment and
Wages. The establishment survey uses modeling rather than sampling for this purpose because the survey
is not immediately able to bring new businesses into the sample. There is an unavoidable lag between
the birth of a new firm and its appearance on the sampling frame and availability for selection.
BLS adds new businesses to the survey twice a year.
Is the count of unemployed persons limited to just those people receiving unemployment insurance
benefits?
No; the estimate of unemployment is based on a monthly sample survey of households. All persons
who are without jobs and are actively seeking and available to work are included among the unemployed.
(People on temporary layoff are included even if they do not actively seek work.) There is no requirement
or question relating to unemployment insurance benefits in the monthly survey.
Does the official unemployment rate exclude people who have stopped looking for work?
Yes; however, there are separate estimates of persons outside the labor force who want a job,
including those who have stopped looking because they believe no jobs are available (discouraged
workers). In addition, alternative measures of labor underutilization (discouraged workers and other
groups not officially counted as unemployed) are published each month in the Employment Situation
news release.
Technical Note
This news release presents statistics from two major
surveys, the Current Population Survey (household survey)
and the Current Employment Statistics survey (establishment
survey). The household survey provides the information on
the labor force, employment, and unemployment that appears
in the A tables, marked HOUSEHOLD DATA. It is a sample
survey of about 60,000 households conducted by the U.S.
Census Bureau for the Bureau of Labor Statistics (BLS).
The establishment survey provides the information on
the employment, hours, and earnings of workers on nonfarm
payrolls that appears in the B tables, marked ESTABLISHMENT
DATA. This information is collected from payroll
records by BLS in cooperation with state agencies. The
sample includes about 160,000 businesses and government
agencies covering approximately 400,000 individual worksites.
The active sample includes about one-third of all nonfarm
payroll workers. The sample is drawn from a sampling
frame of unemployment insurance tax accounts.
For both surveys, the data for a given month relate to a
particular week or pay period. In the household survey, the
reference week is generally the calendar week that contains
the 12th day of the month. In the establishment survey, the
reference period is the pay period including the 12th, which
may or may not correspond directly to the calendar week.
Coverage, definitions, and differences between surveys
Household survey. The sample is selected to reflect
the entire civilian noninstitutional population. Based on
responses to a series of questions on work and job search
activities, each person 16 years and over in a sample
household is classified as employed, unemployed, or not in
the labor force.
People are classified as employed if they did any work
at all as paid employees during the reference week; worked in
their own business, profession, or on their own farm; or
worked without pay at least 15 hours in a family business or
farm. People are also counted as employed if they were
temporarily absent from their jobs because of illness, bad
weather, vacation, labor-management disputes, or personal
reasons.
People are classified as unemployed if they meet all of
the following criteria: They had no employment during the
reference week; they were available for work at that time; and
they made specific efforts to find employment sometime
during the 4-week period ending with the reference week.
Persons laid off from a job and expecting recall need not be
looking for work to be counted as unemployed. The
unemployment data derived from the household survey in no
way depend upon the eligibility for or receipt of
unemployment insurance benefits.
The civilian labor force is the sum of employed and
unemployed persons. Those not classified as employed or
unemployed are not in the labor force. The unemployment
rate is the number unemployed as a percent of the labor
force. The labor force participation rate is the labor force as
a percent of the population, and the employment-population
ratio is the employed as a percent of the population.
Establishment survey. The sample establishments are
drawn from private nonfarm businesses such as factories,
offices, and stores, as well as federal, state, and local
government entities. Employees on nonfarm payrolls are
those who received pay for any part of the reference pay
period, including persons on paid leave. Persons are counted
in each job they hold. Hours and earnings data are for
private businesses and relate only to production workers in
the goods-producing sector and nonsupervisory workers in
the service-providing sector. Industries are classified on the
basis of their principal activity in accordance with the 2007
version of the North American Industry Classification
System.
Differences in employment estimates. The numerous
conceptual and methodological differences between the
household and establishment surveys result in important
distinctions in the employment estimates derived from the
surveys. Among these are:
• The household survey includes agricultural workers,
the self-employed, unpaid family workers, and
private household workers among the employed.
These groups are excluded from the establishment
survey.
• The household survey includes people on unpaid
leave among the employed. The establishment
survey does not.
• The household survey is limited to workers 16 years
of age and older. The establishment survey is not
limited by age.
• The household survey has no duplication of
individuals, because individuals are counted only
once, even if they hold more than one job. In the
establishment survey, employees working at more
than one job and thus appearing on more than one
payroll would be counted separately for each
appearance.
Seasonal adjustment
Over the course of a year, the size of the nation's labor
force and the levels of employment and unemployment
undergo sharp fluctuations due to such seasonal events as
changes in weather, reduced or expanded production,
harvests, major holidays, and the opening and closing of
schools. The effect of such seasonal variation can be very
large; seasonal fluctuations may account for as much as 95
percent of the month-to-month changes in unemployment.
Because these seasonal events follow a more or less
regular pattern each year, their influence on statistical trends
can be eliminated by adjusting the statistics from month to
month. These adjustments make nonseasonal developments,
such as declines in economic activity or increases in the
participation of women in the labor force, easier to spot. For
example, the large number of youth entering the labor force
each June is likely to obscure any other changes that have
taken place relative to May, making it difficult to determine if
the level of economic activity has risen or declined.
However, because the effect of students finishing school in
previous years is known, the statistics for the current year can
be adjusted to allow for a comparable change. Insofar as the
seasonal adjustment is made correctly, the adjusted figure
provides a more useful tool with which to analyze changes in
economic activity.
Most seasonally adjusted series are independently
adjusted in both the household and establishment surveys.
However, the adjusted series for many major estimates, such
as total payroll employment, employment in most
supersectors, total employment, and unemployment are
computed by aggregating independently adjusted component
series. For example, total unemployment is derived by
summing the adjusted series for four major age-sex
components; this differs from the unemployment estimate
that would be obtained by directly adjusting the total or by
combining the duration, reasons, or more detailed age
categories.
For both the household and establishment surveys, a
concurrent seasonal adjustment methodology is used in which
new seasonal factors are calculated each month, using all
relevant data, up to and including the data for the current
month. In the household survey, new seasonal factors are
used to adjust only the current month's data. In the
establishment survey, however, new seasonal factors are used
each month to adjust the three most recent monthly estimates.
In both surveys, revisions to historical data are made once a
year.
Reliability of the estimates
Statistics based on the household and establishment
surveys are subject to both sampling and nonsampling error.
When a sample rather than the entire population is surveyed,
there is a chance that the sample estimates may differ from
the "true" population values they represent. The exact
difference, or sampling error, varies depending on the
particular sample selected, and this variability is measured by
the standard error of the estimate. There is about a 90-
percent chance, or level of confidence, that an estimate based
on a sample will differ by no more than 1.6 standard errors
from the "true" population value because of sampling error.
BLS analyses are generally conducted at the 90-percent level
of confidence.
For example, the confidence interval for the monthly
change in total employment from the household survey is on
the order of plus or minus 430,000. Suppose the estimate of
total employment increases by 100,000 from one month to
the next. The 90-percent confidence interval on the monthly
change would range from -330,000 to 530,000 (100,000 +/-
430,000). These figures do not mean that the sample results
are off by these magnitudes, but rather that there is about a
90-percent chance that the "true" over-the-month change lies
within this interval. Since this range includes values of less
than zero, we could not say with confidence that employment
had, in fact, increased. If, however, the reported employment
rise was half a million, then all of the values within the 90-
percent confidence interval would be greater than zero. In
this case, it is likely (at least a 90-percent chance) that an
employment rise had, in fact, occurred. At an unemployment
rate of around 5.5 percent, the 90-percent confidence interval
for the monthly change in unemployment is about
+/-280,000, and for the monthly change in the unemployment
rate it is about +/-.19 percentage point.
In general, estimates involving many individuals or
establishments have lower standard errors (relative to the size
of the estimate) than estimates which are based on a small
number of observations. The precision of estimates is also
improved when the data are cumulated over time such as for
quarterly and annual averages. The seasonal adjustment
process can also improve the stability of the monthly
estimates.
The household and establishment surveys are also
affected by nonsampling error. Nonsampling errors can
occur for many reasons, including the failure to sample a
segment of the population, inability to obtain information for
all respondents in the sample, inability or unwillingness of
respondents to provide correct information on a timely basis,
mistakes made by respondents, and errors made in the
collection or processing of the data.
For example, in the establishment survey, estimates for
the most recent 2 months are based on incomplete returns; for
this reason, these estimates are labeled preliminary in the
tables. It is only after two successive revisions to a monthly
estimate, when nearly all sample reports have been received,
that the estimate is considered final.
Another major source of nonsampling error in the
establishment survey is the inability to capture, on a timely
basis, employment generated by new firms. To correct for
this systematic underestimation of employment growth, an
estimation procedure with two components is used to account
for business births. The first component uses business deaths
to impute employment for business births. This is incorporated
into the sample-based link relative estimate
procedure by simply not reflecting sample units going out of
business, but imputing to them the same trend as the other
firms in the sample. The second component is an ARIMA
time series model designed to estimate the residual net
birth/death employment not accounted for by the imputation.
The historical time series used to create and test the ARIMA
model was derived from the unemployment insurance
universe micro-level database, and reflects the actual residual
net of births and deaths over the past 5 years.
The sample-based estimates from the establishment
survey are adjusted once a year (on a lagged basis) to
universe counts of payroll employment obtained from
administrative records of the unemployment insurance
program. The difference between the March sample-based
employment estimates and the March universe counts is
known as a benchmark revision, and serves as a rough proxy
for total survey error. The new benchmarks also incorporate
changes in the classification of industries. Over the past
decade, absolute benchmark revisions for total nonfarm
employment have averaged 0.2 percent, with a range from 0.1
percent to 0.6 percent.
Other information
Information in this release will be made available to
sensory impaired individuals upon request. Voice phone:
(202) 691-5200; TDD message referral phone: 1-800-877-
8339.