It’s another month, another blowout jobs report, and this one comes to start out the year.

As CNBC reports, the economy kicked off 2020 in grand fashion, adding 291,000 in private payrolls for the best monthly gain since May 2015, according to a report Wednesday from ADP and Moody’s Analytics.

Advertisement

That was well above the 150,000 estimate from economists surveyed by Dow Jones The total also was a sharp gain from the 199,000 in December.

Some critics argue that there is a “luck” factor in January due to weather. Leisure and hospitality and construction are both weather-sensitive and got boosts from the higher than normal temperatures and low precipitation. Taking that into effect, economist Mark Zandi said the underlying trend for monthly job gains is about half of the January report, or around 150,000, still enough to maintain the unemployment rate. In other words, even assuming Zandi is 100% correct, the addition in jobs would’ve still been enough to maintain the lowest unemployment rate since 1969.

From a size standpoint, the expansion was concentrated in businesses that have 50 to 499 employees, with growth of 128,000. Small companies added 94,000 while large industries grew by 69,000.

Advertisement

That’s not bad news to start out a day for President Trump that will be concluded with his acquittal in the Senate.

The unemployment rate is already below what the Federal Reserve defines as “full employment.” As such, most new jobs are coming from outside of the labor force. According to HiringLabWorkers who are outside the labor force have been the majority of people moving into jobs since the Bureau of Labor Statistics began tracking these flows. For example, recent graduates entering the job market and caretakers returning to paid work skip unemployment and move right into employment. What’s notable is how high this share of flows into employment has gotten. At the peaks of the economic expansions in 2000 and 2007, the share of flows into employment from outside the labor force only briefly got close to 70%. As of November 2019, it has moved all the way up to 74.3%. 

The labor force participation rate stood at 63.2% as of December (data isn’t available for January as of writing), and there is still room for growth. The economy headed into the 2008-09 financial crisis with 66% participation, and peaked in the 2000s at just over 67%. America’s unemployment rate is currently so low that it would have to nearly double to be on par with the European average.