Robust payroll gain points to continued healthy labour market; jobless rate was 3.6 %.
By guest author Sarah Chaney from Wall Street Journal
U.S. hiring strengthened in January as more Americans hopped into the labor market, helping juice up the economy at the start of the year.
Employers added 225000 jobs last month and the unemployment rate ticked up to 3.6 % from 3.5 % in December, an increase that reflected more Americans looking for work, the Labor Department said Friday.
Wages climbed 3.1 % from a year earlier, a touch higher than December’s year-over-year rise of 3 %.
“The labour market and the consumer are the strength of the economy and they are in good shape,” said Eric Winograd, senior economist at AllianceBernstein.
Some of the January job gains came in industries, such as construction and transportation, that benefited from mild winter weather. Still, employers across an array of sectors added jobs. That helped lift payroll growth for the past three months to an average of 211,000 jobs compared with a monthly average of 175,000 for all of last year.
Robert Jones, president of American Sale, an Illinois-based retailer of home-recreation goods such as trampolines and hot tubs, said his 200-person company will add about 20 workers this year. He expects a low unemployment rate and solid economy to help spur consumer spending on big-ticket items.
“When you have more demand, you have more to do, so you just need more people,” Mr. Jones said.
Companies are drawing from a larger pool of job seekers to fill roles. In January, the share of Americans ages 25 to 54 working or looking for work ticked up to 83.1 % from 82.9 % in December, the highest rate since 2008.
A larger flow of workers into the labour force could be keeping wages from breaking out. Average hourly earnings grew 3.1% from a year earlier and have increased at an annual pace of 3% or more for 18 consecutive months. Americans are less likely to feel the pinch from stagnant pay increases because inflation has been modest.
A strong labour market should help propel the broader economy as more Americans have jobs and money to spend. Consumers helped drive the economy in 2019, which closed the year growing at a modest pace.
The Federal Reserve left its benchmark interest rate unchanged at its meeting last week, after cutting interest rates three times last year to buffer the economy against slowdowns in trade and manufacturing. January’s employment report will offer Fed officials comfort in their wait-and-see approach to interest-rate moves.
Solid hiring has been a hallmark of the economic recovery. U.S. employers have added to payrolls for 112 straight months, the longest streak of job gains on record.G
Ace Sign has been able to spot engineering and technical talent through recruitment efforts at technical schools and has also seen increased interest from candidates in larger cities such as Chicago who are searching for quicker commutes and a lower cost of living, Mr. Bringuet said.
“We have had positions where I’ve had 200 applicants in a three-day period, and that was a little overwhelming,” Mr. Bringuet said.
New risks to the economic outlook have emerged in recent weeks. Boeing Co. halted production of its troubled 737 MAX aircraft, an impediment to manufacturing output that is expected to reduce first-quarter U.S. growth. The coronavirus outbreak that originated in China could hinder a rebound in global manufacturing activity.
The rising number of confirmed coronavirus cases has worried some investors. Last week, the benchmark 10-year Treasury yield fell below 1.6%, its lowest level since October.
Major U.S. stock indexes had recouped their steep losses from last week, rising in recent days to close at records Thursday. Following Friday’s (Febr. 7, 2020) jobs report, the Dow Jones Industrial Average slipped 185 points, or 0.6 %. The S&P 500 fell 0.3 %. The Nasdaq Composite also lost 0.3 %.
Annual revisions released in Friday’s jobs report showed the overall employment level for March 2019 was revised down by 514000 jobs to 150.28 million. For all of 2019, employers added 2096 million jobs, a downward revision of 12000.