Hiring surged, wages slumped and the unemployment rate rose slightly in January, as the first month of the new year and a new administration showed the economy, though strong, could still be confounding.
The Labor Department’s Bureau of Labor Statistics said employers added 227,000 workers to nonfarm payrolls during the month, well above the roughly 180,000 economists were anticipating. At the same time, the government’s report said wages grew at an annual rate of 2.5%, below the predicted 2.7% and well off December’s 2.9% rate. It was the smallest increase since August.
“We haven’t really seen that significant acceleration in wage growth that we would anticipate given how close we are to full employment,” Ryan Sweet, an economist at Moody’s Analytics, told Bloomberg News. “I think that’s coming, it’s just going to take a little bit more time.”
The unemployment rate ticked up to 4.8% from December’s 4.7%. Economists were expecting it to be unchanged. The increase was largely due to more people joining the labor force in January — the participation rate rose from 62.7% to 62.9%. But in addition, the number of the unemployed rose by about 100,000 to 7.64 million. An increase in unemployment is common in January as seasonal jobs come to an end.
January’s job growth was strong in multiple sectors. Construction hiring, often slowed by winter weather, had one of its strongest months with employers adding 36,000 jobs. In other areas of the goods producing sector, hiring was modest: Manufacturers added 4,000 jobs and the struggling mining sector, which includes petroleum production, added 4,000.
The service sector added 192,000 jobs. The strongest areas:
- Retailers were up 45,900 jobs; clothing and clothing accessories store alone up by 18,300;
- Banks and insurance companies +19,800;
- Real estate and leasing businesses +11,800;
- Healthcare +18,300;
- Restaurants and bars +29,900;
- Profession and technical services +22,700, driven largely by a 12,500 increase in computer systems design.;
- Temp agencies +14,800.
The BLS also issued adjusted numbers for the year, which increased the 12-month job count by 85,000 for a total of 2.34 million new jobs last year.