Employers added 467K jobs in January, but cut 6.6K in accounting

The employment situation in January was better than expected, as employers added a robust 467,000 jobs despite the Omicron variant, the U.S. Bureau of Labor Statistics reported Friday. However, accounting and bookkeeping jobs dropped by 6,600, and the unemployment rate ticked up one-tenth of a point to 4.0%.

Analysts had predicted a gain of only about 125,000 jobs for the month. Nevertheless, employment growth continued in leisure and hospitality, professional and business services, retail trade, transportation and warehousing. Average hourly earnings for all employees on private nonfarm payrolls increased by 23 cents to $31.63.

Professional and business services added 86,000 jobs in January, with the main job gains happening in management and technical consulting services, which added 16,000 jobs, computer systems design and related services (15,000 jobs), architectural and engineering services (8,000 jobs), and other professional and technical services (7,000 jobs). The Labor Department also revised upward the previously reported numbers for November and December for a total of 709,000 additional jobs.

Andrew Harrer/Bloomberg

Even though the accounting and bookkeeping services sector lost 6,600 jobs last month, there’s still robust demand for accountants and tax professionals, especially during tax season. But employers are having a hard time drawing young people into the profession to fill the pipeline of retirees.

“It’s concerning for sure,” said Kelly Richmond Pope, an accounting professor at DePaul University in Chicago, who recently began teaching an Intro to Financial Accounting online course on Outlier.org. “Part of the problem I see as an educator is [that] we don’t show learners the exciting parts of accounting, and we have to have a more engaging approach to introduce this dynamic profession to people. If we have a shortage of accountants, that’s a problem because the backbone of our economy is business — small, medium and large — so there’s a need for an accountant in every aspect of the way our economy functions.”

In contrast to the employment gains shown on the Labor Department jobs report, CBIZ, a Top 100 Firm in Cleveland, found a 0.95% seasonally adjusted decline in small business jobs in January. The CBIZ Small Business Employment Index reported depressed hiring in all four regions of the country, with the Northeast (-4.42%) and Central (-3.33%) regions showing the biggest changes from December, while the West (-1.71%) and Southeast (-1.70%) had smaller declines. The biggest hiring increases occurred in the mining, rental and leasing sectors. However, the accommodations and food services, agriculture, arts and entertainment, real estate, and retail sectors suffered hiring declines among the 3,500 small businesses tracked by CBIZ.

“It is very likely that the uptick in omicron cases was one of the variables that contributed to steep declines seen in January,” said CBIZ executive vice president Philip Noftsinger in a statement. “January typically experiences a hiring downturn following the holiday shopping season but this year’s trends show a more significant change.”