The Bureau of Labor Statistics (BLS) found in its latest monthly jobs report that the economy started the year by adding 200,000 new jobs. The unemployment rate held steady at 4.1%, its lowest level since December 2000, for the fourth straight month. Average hourly earnings of private-sector production and nonsupervisory employees increased by 3 cents to $22.34 in January.
Still, wage growth has for years remained stubbornly modest compared with past expansions.
“US bond markets aren’t going to like it though”, Bartholomew said.
U.S. non-farm payrolls data showed that 200,000 new jobs were created in January, up from 160,000 in December and beating market forecasts of a rise of 180,000.
Many economists credit the Fed’s low-rate policies, including the measured pace of rate increases under Chair Janet Yellen, with stimulating enough growth to bolster hiring and wages. But more attractive wage offerings, along with further labor-market strengthening, will also help to draw individuals of prime working age back into jobs.
Still, other measures of compensation also suggest the tightest labor market in nearly two decades is finally forcing companies to pay employees more.
“Real wage growth, after we adjust for inflation, has been slowing down again in 2016 and 2017”, said Jay Shambaugh, director of The Hamilton Project at the Brookings Institution and former member of President Obama’s White House Council of Economic Advisers.
Employers’ words may finally be translating into action.
USA job creation accelerated in January, as labour markets continued to absorb workers at a robust pace, unemployment clung to a record low and wages moved higher, the government reported today.
“Labor is becoming scarce, and employers have to work to find, retain and train employees”, Diane Swonk, chief economist at Grant Thornton, said. The three-month moving average in January showed an increase of 3,200 jobs. Construction payrolls increased by 36,000 jobs after rising 33,000 in December.
Goods-producing employment rose by 57,000 jobs during the month, as gains in manufacturing led by adding 15,000 jobs in January. Restaurants, hotels, bars and entertainment gained 35,000. Manufacturing has added 186,000 jobs over the past 12 months.
“We are really firing on all cylinders”, says Josh Wright, chief economist at iCIMS, a software firm focused on human resources.
Still, the jobs data point to an economy on solid footing, fueled by strong consumer spending and global growth.
The January jobs report also showed that Hispanic unemployment ticked up to 5%, from 4.9% in December. The number of workers employed in part-time jobs who want full-time work is still elevated.
Due to a range of factors, including broad economic forces related to globalization and technological advances, certain jobs are becoming less secure. The change for December was revised up from 148,000 jobs added to 160,000. It has been slowly declining since a peak of 10 percent in 2009. Jobless claims are at their lowest point in decades. That, in turn, would put pressure on the Federal Reserve to speed up the pace of rate increases.
Higher wages will accrue to the benefit of continuing workers.
Fed officials Wednesday expressed optimism that inflation will rise toward its target this year.
American investors certainly see more rate increases on the horizon.
The dollar climbed sharply on Friday after United States labour market data showed more jobs were created in January than expected, while wages also rose at an unexpectedly sharp pace.