Monday, 19 November, 2018

Jobs Report: Economy Added 227000 Jobs in January, While Wages Slowed

Melinda Barton | 05 February, 2017, 01:53

A day ahead of the closely watched monthly jobs report, the Labor Department released a report on Thursday showing a bigger than expected drop in first-time claims for US unemployment benefits in the week ended January 28th. The percentage of adults working or looking for jobs increased to its highest level since September.

Average wages moved up slightly, giving a 2.5 percent increase for the last 12 months, compared with 2.0 percent a year ago.

Another area of concern was a rise of 242,000 in the number of part-time workers who prefer full-time jobs.

Trump released a detailed tax plan during his campaign aimed at promoting economic growth.

January's jobs figures reflect hiring that occurred mainly before Trump was inaugurated on Jan. 20. Demand for waiters and waitresses remains robust, with food services and drinking establishment jobs up by 30,000; the food and beverage industry has added 286,000 jobs over the a year ago. The supporting evidence goes far beyond the single unemployment rate reported Friday that draws the most attention every month.

Unemployment has fallen in the months since Trump's pronouncement about the "real rate".

The good jobs report could cause some issues for President Trump's efforts to push through his policy proposals. On the flip side, government employment dropped by 10,000 jobs. The Bureau of Labor Statistics (BLS) found in its latest monthly jobs report the upward trend continued with 227,000 new jobs.

But the report also offered signs that the labor market may not be as tight as previously thought, and that it has yet to reach full speed. During the past year the number of long-term unemployed has declined by 244,000. That's significantly more than most economists had expected. During Obama's 96 months in office, the economy added 9.2 million jobs, for a monthly average of 191,000. Still, the labour market continues to tighten, which could soon spur a faster pace of wage growth.

"You could have a faster pace of job growth, because you have more people out there looking for work", said Michelle Meyer, chief USA economist at Bank of America Merrill Lynch.

Now, the continued demand for workers to fill new positions is finally pushing wages higher, according to Jim O'Sullivan, chief US economist at High Frequency Economics.

"That was a weakness in this report that you can't erase", Krosby said.

"Plenty to build on here for Donald Trump who has tended to put a premium on manufacturing jobs", said Alan Ruskin, global head of G10 FX strategy at Deutsche Bank in NY.

Employment in construction gained 36,000 in January, following little change in December.