The BLS adjusted its survey methodology to more accurately reflect the state of employment in the USA, and those tweaks worked in the unemployment rate’s favor. Employers added 151,000 jobs in January as opposed to the 185,000 economists expected, according to the Bureau of Labor Statistics. The figure fell short of economists’ expectations and represents the slowest pace of hiring since September. Economists surveyed by CNNMoney projected that the economy would create 197,000 new jobs last month.
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In any case, the latest snapshot of labor-market trends did little to clear up questions about where the economy is going. Among big private industries, only the mining sector, which includes energy companies struggling with low oil prices, cut jobs.
“Amid all the global economic turmoil and domestic market gyrations, positive job growth, the drop in the unemployment rate to 4.9 percent, and the uptick in wages show the U.S.is heading in the right direction”.
“To keep moving us towards the goal of full employment – an economy where there is high demand for labor, and workers have more bargaining power to negotiate higher wages and get the hours they want – we need to keep our foot off the brakes and consider tapping on the gas”, Elise Gould, a senior economist and director of health policy research at the Economic Policy Institute, wrote in a research note Friday.
Don’t expect recession talk to disappear because of one solid report. Employment in the temporary help industry contracted in January.
Still, the overall takeaway from Friday’s numbers is that the job market remains on solid footing.
December payrolls were revised down to 262,000 from 292,000 and November employment was revised up to 280,000 from 252,000.
Sectors with the largest increases in employment were retail (58,000 jobs added), healthcare (37,000 jobs added) and manufacturing (29,000 hires). The U.S. central bank raised its short-term interest rate in December for the first time in almost a decade. The labor-force participation rate was basically flat at 62.7% in January. The retirement of the baby boom generation means millions of workers are leaving the labor force for reasons that have nothing to do with the economy. There is a concern that if the Fed raises rates that that will cause job growth to slow. Indeed, the share of so-called prime-age workers – those between the ages of 25 and 54 – who are working jumped in January to its highest level since 2008. Hourly pay rose 2.5% from January 2015 to January 2016.
“The only thing that is a little bit concerning is that rates are still so low”, Hale said during a telephone interview. “There’s nothing in this report to really force a March rate increase, but again the average hourly number definitely suggests that if we see continued improvement in earnings, then we can sustain more rate increases”.
If the early 2000 years reflected a jobless recovery, the current expansion has been marked by relatively flat wages.
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And payrolls in transportation and warehousing fell by 20,000, largely because of unusually large layoffs among couriers and messengers after strong seasonal hiring the previous two months, Labor said. About three-fourths of the job losses over this period have been in support activities for mining.
