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 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.
"A mid-year lift-off in the interest rate is fait accompli ... there
was good news on many fronts," said Sung Won Sohn, an economics
professor at California State University Channel Islands in
Camarillo.
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 increased confidence.
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 ended lower amid concerns over Greece's debt
negotiations.
Rate futures shifted to show traders now expect a rate increase in
September. Before the report, they were anticipating an October
hike. Some top Fed officials have been pointing to a June policy
tightening.
A Reuters survey of Wall Street's largest banks published after the
data showed most economists expect a June take-off.
"Hundreds of thousands of discouraged workers were optimistic enough
to start looking for work in January. Most Fed officials are likely
to see this report as good reason to be nervous about potential
economic overheating," said Chris Low, chief economist at FTN
Financial in New York.
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 target.
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"Employment growth is clearly on fire and it's beginning to put
upward pressure on wage growth," said Paul Ashworth, chief U.S.
economist at Capital Economics in Toronto. "The Fed can't wait much
longer in that environment."
MASSIVE TAILWIND
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 December.
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. Government payrolls fell 10,000, while transportation
employment dropped 8,600, the first decline since last February.
Temporary staffing slipped 4,100, the first drop in a year.
The average workweek was steady at 34.6 hours.
(Reporting by Lucia Mutikani: editing by Andrea Ricci and Tim
Ahmann)
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