In fact, Fed policy makers suggested that labor markets were gaining so much momentum that the central bank would probably be able to raise rates a total of four times in 2016, moving US monetary policy that much closer to ‘normal’.
The unemployment rate, which has held steady at 5 percent the past few months, dropped slightly to 4.9 percent.
“Judging from the notable 0.5 percent monthly increase in hourly wages, the impressive job creation of recent years may finally be leading to more robust, and much-needed, wage growth”. Manufacturing, which has been undermined by a strong dollar and weak global demand, added the most jobs since August 2013.
Wage growth was stronger than expected. While still low, that estimate is up from 15 percent a year ago. “The headline today is something that most people will forget very quickly but the details are really solid, it makes the case that inflation is possible in the USA against the backdrop of a lot of the financial turmoil that we’ve been seeing”.
“The lower unemployment rate and rising wages further support the view that the labor market is doing nothing but tightening”, said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania.
Yet the ranks of professionals only increased by 9,000, largely because of a big drop in temps.
The same report shows that there were 151,000 new jobs created in January.
January’s softer job gains were payback after the warmest temperatures in years bolstered hiring in weather-sensitive sectors like construction. January employment also lost the lift from the hiring of couriers and messengers, which was buoyed in November and December by strong online holiday sales.
And last month, the Commerce department reported that GDP growth had slowed to 0.7 percent.
Against an uncertain economic backdrop, the United States employment report for January just arrived. The industry has risen by 384,000 positions during the past year. The number of workers marginally attached to the labor force, including discouraged workers, was essentially the same as a year earlier. The broader measurement of unemployment, which the BLS calls U-6 and which includes those marginally attached to the labor force and those working part time who want to be full time, was unchanged for the month at 9.9 percent.
Economic growth decelerated to a 0.7 per cent annualised rate in the final three months of 2015 after growing at a 2 per cent pace in the third quarter. In January, employment gains were likely concentrated in the services sector, with mining probably losing more jobs and manufacturing reversing some of December’s gains. And temporary help services, often a harbinger of future hiring, shrunk by more than 25,000 posts.
However, the report also pointed to declines in employment in private educational services, transportation and warehousing, and mining. But hiring could slow in the months ahead after a number of retailers, including Walmart and Macy’s announced dozens of store closures.
Friday’s jobs report was closely watched because of murmuring that the USA economic expansion, which began in the summer of 2009, might be approaching a recession. Almost 150,000 energy jobs have disappeared since September 2014. Oil prices have plunged about 70 percent in the last 18 months, forcing firms like oilfield services provider Schlumberger to slash their workforces.