Washington, DC, USA: Total nonfarm payroll employment increased by 200,000 in January, 20000 more than consensus economist’s estimates, the U.S. Bureau of Labor Statistics reported today. U.S. hiring picked up in January and wages rose at the fastest annual pace since the recession ended, as the U.S economy march toward full employment extended into 2018.
The jobless rate held at 4.1 percent, matching the lowest since 2000, while average hourly earnings rose a more-than-expected 2.9 percent from a year earlier, the most since June 2009.
Treasury yields and the dollar gained, while stock futures remained lower, as the data reinforced the Fed’s outlook for three interest-rate hikes this year under incoming Chairman Jerome Powell, including one that investors expect in March. The figures may also add to the likelihood of a fourth rate increase in 2018.
The report puts the nation closer to full employment and sets a solid tone for hiring this year following continued gains in payrolls in 2017. That could be starting to generate a long-awaited, sustained pickup in wages and boost demand in this expansion, which may also get a lift this year from tax-cut legislation signed by President Donald Trump in December.
The Labor Department’s figures included its annual benchmark update to the establishment survey, spanning payrolls, hours and earnings over the past five years.
Average hourly earnings rose 0.3 percent from the prior month following an upwardly revised 0.4 percent gain, the report showed. The 2.9 advance from a year earlier — which partly reflected a downward revision to the January 2017 wage figure — compared with projections for a 2.6 percent increase. December’s gain was revised upward to 2.7 percent.
Faster wage growth also have the potential to feed into price gains. Fed policy makers this week left borrowing costs unchanged while adding emphasis to their plan for more hikes at a gradual pace. They also said inflation is expected to move up this year and to stabilize around their goal.
Revisions to prior reports subtracted a total of 24,000 jobs to payrolls in the previous two months, as November’s total was changed to 216,000 from 252,000, according to the report.
For all of 2017, the picture was more positive, with 2.17 million created in Trump’s first year as president, revised from a previous estimate of 2.06 million; in 2016, the last full year under President Barack Obama, the total was 2.34 million jobs.
The breakdown of January data across industries showed strength across industries, especially in goods-producing jobs: Construction payrolls rose by 36,000 and manufacturing added 15,000 workers. That’s in line with the resurgence in factory activity and rebound in housing.
Service providers added 139,000 employees. Retailers increased headcounts by 15,400 positions in January, following a 25,600 decrease. The category of warehousing and storage — partly associated with Internet shopping — added 11,100 jobs, the report showed.
One weaker spot in the report was the average workweek for all private employees, which unexpectedly decreased to 34.3 hours from 34.5 hours.
Adjustments to population estimates starting in January make the unemployment and participation rates difficult to compare with previous months. When removing these adjustments, the labor force rose by 185,000.
The U-6, or underemployment rate, rose to 8.2 percent from 8.1 percent; measure includes part-time workers who’d prefer a full-time position and people who want a job but aren’t actively looking
People working part-time for economic reasons rose by 74,000 to 4.99 million in January, though months aren’t directly comparable
Participation rate was unchanged at 62.7 percent; the rate, hovering near the lowest level since the 1970s, will continue facing downward pressure as older workers retire
Total private employment rose by 196,000 (est. 181,000) after increasing 166,000; government payrolls rose by 4,000
Number of people out of work for 27 weeks or longer, or the so-called long-term unemployed, fell as a share of all jobless to 21.5 percent from 22.9 percent.