28 May 2020

Strong U.S. Job Growth

Share This Story
U.S. job growth rose solidly in January and wages rebounded, a show of economic strength that put a mid-year interest rate increase from the Federal Reserve back on the table. Nonfarm payrolls increased 257,000 last month, the Labor Department said on Friday, outstripping Wall Street forecasts.

At the same time, data for November and December was revised to show a whopping 147,000 more jobs created than previously reported, bolstering views consumers will have enough muscle to carry the economy through rough global seas.

At 423,000, November's gain was the largest for any month since May 2010, when employment was boosted by government hiring for a national census. Over the past three months, more than one million jobs have been created, the first time that milestone has been reached since late 1997. The unemployment rate rose one-tenth of a percentage point to 5.7 percent, but that was because Americans poured into the labor force to hunt for work in a show of increased confidence.

The dollar rallied against a basket of currencies and prices for U.S. Treasury debt fell as investors brought forward bets on a rate hike. U.S. stocks were trading marginally higher. Rate futures shifted to show traders now expect a rate increase in September.


January marked the 11th straight month of job gains above 200,000, the longest streak since 1994. Sputtering growth overseas and lower oil prices have weighed on U.S. exports and business investment, but the jobs report suggested the economy continued to be a bright spot in an otherwise gloomy world. Wages increased 12 cents last month, the largest gain since June 2007, after falling five cents in December. That took the year-on-year gain to 2.2 percent, the fastest since August, but still below where Fed officials would like to see it.

The U.S. central bank, which has held benchmark borrowing costs near zero since December 2008, ramped up its assessment of the labor market last week, and economists said the jobs data raised the prospect it would push rates higher sooner, despite inflation running below its 2 percent target.


The pick-up in wages is likely to combine with lower oil prices to provide a massive tailwind for consumer spending and keep the economy growing at a healthy clip.

In addition to the firmer wages and job growth, the labor force participation rate, or the share of working-age Americans who are employed or at least looking for a job, rose two-tenths of a percentage point to 62.9 percent. The employment-to-population ratio rose to 59.3 percent, the highest since July 2009, from 59.2 percent in December.

But a broad measure of joblessness that includes people who want to work but have given up searching and those working part-time because they cannot find full-time employment rose to 11.3 percent from 11.2 percent in December.

In January, private payrolls increased by 267,000, while November and December private employment was revised higher. Private payroll gains in November were the largest since September 1997.

The manufacturing sector added 22,000 jobs last month, while construction payrolls increased 39,000. Oil and gas extraction employment, however, fell 1,900, reflecting layoffs connected to lower oil prices. Retail employment increased 45,900 after braking sharply in December.

Click here to access the full article on Reuters.

Join Our Online Community
Join the Better Way To Retire community and get access to applications, relevant research, groups and blogs. Let us help you Retire Better™
FamilyWealth Social News
Follow Us