The Labor Department released last month’s employment figures Friday morning, and the report shows U.S. employers picked up the pace of hiring last month, with a rebound in wages, supporting views that the labor market and the broader economy are moving closer to full health more than five years after the recession.
Here are the highlights from this morning’s report.
What you need to know: January was the 52nd straight month of employment gains in the U.S., and the 12th straight month of job additions above 200,000.
The job market has been steadily improving, which is good news. However, on the downside, hourly wages are still somewhat sluggish, and the number of long-term unemployed remains almost 50% higher than it was before the recession hit.
Hourly wages advanced 2.2%, posting the largest gain since August and edging past the 2% average since the expansion began in mid-2009. While employers have picked up their hiring, they’ve been less apt to boost pay. Economists and regulators have been anxiously waiting for wages to pickup, a key indicator for when the Federal Reserve may raise interest rates.
December’s jobs report showed wages falling five cents, surprising analysts and leading interest rate hike expectations to be dialed back to September. Last week the Fed ramped up its assessment of the labor market. Strong job gains and an improvement in wages could harden expectations of a June policy tightening.
The Fed, which had continually worried that the labor market is not as healthy as it hoped nearly seven years after the start of the Great Recession, is less worried these days. Economic activity “has been expanding at a solid pace” and job market conditions have “improved further,” leading the Fed to expect continued moderate growth and a possible rate rise sometime this year.
The big numbers: The U.S. labor market added 257,000 jobs in January, surpassing economists’ estimates of 228,000 jobs, according to Bloomberg data. The unemployment rate ticked up to 5.7% from 5.6% in December. Its rise is a good sign, suggesting more Americans are searching for jobs, swelling the labor force. It’s a sign of growing confidence among job seekers.
Job gains for November and December were revised up. November non-farm payrolls increased to 423,000 from 353,000, and December gains increased to 329,000 from 252,000 jobs. November’s reading of 423,000 job additions represents the strongest month of private-sector job gains since 1997.
The number of long-term unemployed was little changed at 2.8 million.
What you may have missed: January builds on a stellar year for job growth: Employers added almost 3 million workers last year, the most since 1999. However, January’s gains were the smallest advance since August.
That’s not surprising. January is typically the month with the largest seasonal adjustment as statisticians take into account the mass firings of temporary staff following the holidays, and the big gains from previous months may have led to larger-than-normal dismissals, according to Bloomberg economists Carl Riccadonna and Josh Wright.
Some of the biggest job gains last month went to the retail and construction sectors, which added 46,000 and 39,000 jobs, respectively. Healthcare employment also ticked up on a seasonal basis by 38,000.
—Reuters contributed to this report.
