Strong January Jobs Report, But Wage Growth Still Soft
- Author: Sonia Alvarado Feb 04, 2017,
Feb 04, 2017, 0:50
USA employers added 227,000 jobs in January, the Bureau of Labor Statistics said Friday. Job gains occurred in retail trade, construction, and financial activities. Hourly pay increased 2.5% from January 2015 to January 2016, down from 2.8% in the prior month.
The labor force participation rate rose to 62.9 percent, up from 62.7 percent in former President Barack Obama's final jobs report last month. The survey was taken before the presidential inauguration, and the numbers are volatile and subject to revision. "Today's report reflects the consumer confidence that the Trump presidency has inspired".
"Time will tell if Trump can keep the economy's winning streak alive".
January's non-farm payrolls report was mixed, at best. The Fed raised its benchmark rate in December for the first time in a year but gave no signal after a meeting this week that it's poised to act again in the very near term.
Interestingly, January's wage growth was partly the result of higher minimum wages that took effect in cities and states across the country on Jan. 1.
The robust jobs number beat most predictions from economists, who had pegged the payroll increase at 175,000, according to NPR's Yuki Noguchi.
Trump has made job growth a central part of his economic agenda.
During the election campaign, Donald Trump repeatedly denounced the official unemployment rate of five per cent as false. But they are right that the rate can be a flawed economic indicator.
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Thanks to the addition of nearly 600,000 people into the labor force last month, the U-3 unemployment rate has gone up from 4.6% in November to 4.8% in January.
The US Federal Reserve this week chose to keep interest rates steady, but as the economy heats up and especially if wages continue to rise, the central bank will feel more pressure to raise the benchmark federal funds rate to clamp down on inflation. The increase in the size of the workforce helped push the unemployment slightly higher to 4.8 percent, up from 4.7 percent in December.
To a large extent, however, Trump's critique of the unemployment rate is out of date.
More people were working or looking for work. The development suggested the labor market's steady expansion in recent years may be encouraging some Americans who gave up job searches to return to the market.
The good news is, the USA job market is off to a strong start in 2017. But it isn't clear that hiring is likely to accelerate, either.
After moving to the upside earlier in the session, stocks remain mostly positive in mid-day trading on Friday.
Average hourly earnings in construction were better than for all jobs, +3.2% including supervisory personnel and +3.5% for non-supervisory personnel.