Advance copies of this statement are made available to the 

press under lock-up conditions with the explicit 

understanding that the data are embargoed until 8:30 a.m. 

Eastern Standard Time.

Statement of

Kathleen P. Utgoff

Commissioner

Bureau of Labor Statistics

Friday, February 4, 2005

Nonfarm payroll employment increased by 146,000 in 

January, and the unemployment rate decreased to 5.2 

percent. Since its most recent low point in May 2003, 

payroll employment has increased by 2.7 million and is now 

just above the employment peak reached in February 2001. 

(Data from the survey of business establishments have been 

revised as a result of the annual benchmarking process and 

the updating of seasonal adjustment factors.) In January, 

employment rose in several service-providing industries, 

while manufacturing continued to lose jobs, as it has since 

September. 

 Over the month, employment growth continued in 

education and health services. This sector added 35,000 

jobs in January and has grown by 424,000 over the year;

gains were widespread among the component industries. 
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Financial activities employment increased by 21,000 in 

January. The credit intermediation industry and the 

securities, commodities, and investments industry 

contributed to the gain. 

Transportation and warehousing added 34,000 jobs over 

the month and has seen its employment increase by 166,000 

since July 2003. About half of January’s gain occurred in 

courier and messenger services. The increase in that 

industry more than offset a decline in December. 

Employment continued to trend up over the month in 

professional and business services and in leisure and 

hospitality. Retail trade employment edged up in January 

and has increased by 200,000 since June 2003. Wholesale 

trade employment was flat over the month. Since its recent 

low in August 2003, however, the industry has added 99,000 

jobs; about half of that gain occurred in its electronic 

markets and agents and brokers component. 

In contrast to the widespread job growth in the 

service sector, manufacturing employment fell by 25,000 in 

January. After reaching an employment trough in February 

2004, manufacturers added 85,000 jobs through August. The 

trend has since turned downward, and 61,000 jobs have been 

lost. January’s job loss in part reflected more extensive 
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seasonal shutdowns than usual for the month in motor 

vehicles and parts. 

Construction employment was little changed in January, 

after seasonal adjustment. Adverse weather may have held 

down employment in the industry during the month. Since 

its recent low in March 2003, construction has added 

407,000 jobs. 

Average hourly earnings for private production or 

nonsupervisory workers rose by 3 cents in January for the 

second consecutive month. Over the year, average hourly 

earnings grew by 2.6 percent. Over the month, the average 

workweek declined by 0.1 hour to 33.7 hours. 

As noted earlier, these payroll survey figures reflect 

the incorporation of our annual benchmark revisions. Each 

year, we anchor our sample-based survey estimates to full 

universe counts of employment, derived principally from 

administrative records of the unemployment insurance tax 

system. 

The impact of the revisions in the March 2004 

reference month is an upward adjustment of 203,000, or 

about two-tenths of one percent of the total nonfarm 

employment level. This percentage adjustment is about 

average for the past decade. The benchmark process 

resulted in revisions to all not-seasonally-adjusted data 
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series from April 2003 forward. In addition, with today’s

release, the seasonally adjusted establishment survey data 

from January 2000 forward have been revised to incorporate 

updated seasonal adjustment factors. 

Turning now to our survey of households, the 

unemployment rate declined to 5.2 percent in January from 

5.4 percent in December; this change primarily reflects a 

decline in the rate for men. The labor force participation 

rate, at 65.8 percent, edged lower over the month. 

Household survey data beginning in January 2005 

reflect updated population controls. As part of its annual 

review of intercensal population estimates, the U.S. Census 

Bureau determined that a very small downward adjustment 

should be made to the household survey population controls. 

This adjustment stems from revised estimates of net 

international migration and updated vital statistics 

information. The updated controls resulted in a decrease 

of 8,000 in the estimated size of the civilian 

noninstitutional population 16 years of age and over for 

December 2004. Official population and labor force 

estimates for December 2004 and earlier months will not be 

revised. 
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A comparison of December 2004 data based on the old 

and new controls shows that the population adjustments 

caused small decreases in the labor force (-49,000), 

employment (-45,000), and unemployment (-4,000). The 

unemployment rate, labor force participation rate, and 

employment-population ratio, however, were essentially 

unaffected. 

To summarize the labor market data for January, 

nonfarm payroll employment rose by 146,000, with increases 

occurring in a number of service-providing industries. The 

unemployment rate, at 5.2 percent, is about 1 percentage 

point lower than its most recent peak of 6.3 percent in 

June 2003.