|
 Non-farm payrolls increased by 151,000 jobs and the unemployment
rate slipped one-tenth of a percentage point to 4.9 percent, the
lowest since February 2008, the Labor Department said on Friday. The
payrolls gain was a sharp step-down from the average 231,000 jobs
per month during the fourth quarter.
"The fact that payroll gains fell back to earth is not necessarily a
bad sign. Most indications are that the job market in the U.S. is on
solid footing and improving," said Nariman Behravesh, chief
economist at IHS in Lexington, Massachusetts.
Economists had forecast employment increasing by 190,000 in January
and the jobless rate steady at 5 percent. The economy added 2,000
fewer jobs in November and December than previously reported.
On top of a 0.5 percent jump in average hourly earnings, which was
the biggest gain in a year, employers increased hours for workers.
Manufacturing, which has been undermined by a strong dollar and weak
global demand, added the most jobs since August 2013.
Economists said the combination of strong wage growth and falling
unemployment suggested a March interest rate increase from the
Federal Reserve could not be completely ruled out.
The dollar rose against a basket of six major currencies on the data
after hitting a roughly 15-week low on Thursday. Prices for U.S.
government debt initially fell, but pared losses as stocks on Wall
Street extended their decline.
"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. "Clearly, there are more uncertainties today than when
the Fed raised rates in December and hinted that there could be four
increases this year. But the labor market is absolutely not one of
them."
Tightening financial market conditions and signs that both the
domestic and global economies were slowing had undercut the case for
a Fed rate hike next month and lowered the probability of monetary
policy tightening this year.
The U.S. central bank raised its short-term interest rate in
December for the first time in nearly a decade.
Federal Reserve Chair Janet Yellen has said the economy needs to
create just under 100,000 jobs a month to keep up with growth in the
working-age population.
The economy, especially voters' perceptions of their job prospects,
will likely be an issue in the November elections. President Barack
Obama lauded the labor market progress.
"This progress is finally starting to translate into bigger
paychecks. The United States of America right now has the strongest,
most durable economy in the world," Obama told reporters at the
White House.
Republican National Committee chairman Reince Priebus, however, said
the economy was "still failing the millions of Americans who have
given up looking for work."
WEATHER PAYBACK
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.
[to top of second column] |
The economy grew at a 0.7 percent annual rate in the fourth quarter,
restrained by headwinds that included the strong dollar and efforts
by businesses to sell off inventory.
A separate report from the Commerce Department showed the buoyant
dollar cutting into exports in December, causing the trade deficit
to widen 2.7 percent to $43.4 billion.
In January, the unemployment rate fell even as more people entered
the labor force. The labor force participation rate, or the share of
working-age Americans who are employed or at least looking for a job
rose one-tenth of a percentage point to 62.7 percent. It remains
near four-decade lows.
Low participation could crimp job growth as the supply of labor
shrinks, unless a strong rise in wages lures more people back into
the labor force. The private sector accounted for all employment
gains in January, adding 158,000 positions.
The services sector created 118,000 jobs, the fewest in 10 months.
That was because temporary help services fell 25,200 and courier and
messenger employment declined by 14,400 jobs. Hiring in these
categories normally rises during the holiday season.
Educational services lost 38,500 jobs, but retail payrolls added a
strong 57,700 positions. Hiring could slow in the months ahead after
a number of retailers, including Walmart <WMT.N> and Macy's <M.N>
announced dozens of store closures.
The embattled manufacturing sector surprisingly added 29,000 jobs
last month, while mining laid off 7,000 more workers. Mining
payrolls have decreased by 146,000 since peaking in September 2014.
About three-fourths of the job losses over this period have been in
support activities for mining.
Further losses are likely after a report on Thursday showed energy
firms in January announced plans to lay off 20,246 workers. Oil
prices have plunged about 70 percent in the last 18 months, forcing
firms like oilfield services provider Schlumberger <SLB.N> to slash
their workforces.
Construction payrolls rose 18,000, cooling off after adding 146,000
jobs in the fourth quarter. Government employment fell 7,000.
(Reporting by Lucia Mutikani; Editing by Andrea Ricci)
[© 2016 Thomson Reuters. All rights
reserved.] Copyright 2016 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed. |
