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
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.
WAGE GAINS QUICKEN
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
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
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.
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