USA jobs surge leaves door open to rate rise this year

Share

MARTIN: So explain how it seems to indicate that the government shutdown, which affected 800,000 federal workers, that had virtually no effect on the job market.

Employers added 304,000 jobs last month and the unemployment rate inched up to 4.0 percent due to the shutdown, the Labor Department said. Wages have risen by 3.2 percent since this time past year.

"We expect the labor market to gradually cool in 2019 but the combination of solid payroll gains, rising wages and falling unemployment rate will continue", Oxford Economics said in a client note.

Different job sectors contributed to USA job growth.

And hiring in December was revised sharply downward to a still-strong 222,000, but far lower than the 312,000 positions initially reported. Those who continued to work through the shutdown without pay were marked "employed" in both surveys. It would also count contractors who did not work during this period as unemployed.

The 380,000 furloughed federal workers counted as "employed" in the Establishment Survey, which calculates payroll numbers, but unemployed in the Household Survey, which calculates unemployment rate. Glassdoor saw a 10 percent bump in federal workers looking for jobs on its website two weeks after the government shutdown started - when they missed their first paychecks.

Average hourly earnings rose 0.1% from January, which is slower than the past few months, but still 3.2% over the year - well above inflation.

The housing market has slumped as mortgage rates have increased. Chairman Jerome Powell said earlier this week that the case for raising the Fed's benchmark rate had weakened. The U.S. central bank removed language from its December policy statement that risks to the outlook were "roughly balanced".

More news: Best Frenemies: Chris Christie and Donald Trump

The string of job growth underscored the long economic expansion since the Great Recession. Confidence has been eroded by the fight over the government budget and Washington's trade war with Beijing.

How did the shutdown change the jobs report? It also incorporated new population estimates.

He said: "It's also possible that today's strong data will be among the last extremely strong employment reports". Manufacturing payrolls increased by only 13,000 in January, reflecting the more downbeat sentiment in an array of industrial sectors that are vulnerable to slower global growth.

Employment at construction sites surged 52,000, the most since February 2018, after increasing 28,000 in December.

MARTIN: So January - clearly, a big month for hiring.

Job gains mainly occurred in leisure and hospitality, construction, health care, and transportation and warehousing, the bureau said. Retail payrolls rebounded by 20,800 jobs. Average hourly earnings, meanwhile, rose by 3 cents to $27.56.

The average workweek was unchanged at 34.5 hours in January. The views expressed in this column are the author's own and do not reflect those of Berenberg Capital Markets, LLC. This article is strictly for informational purposes only. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

Share