USA employment up and wages down in latest employment report

John Blanding  Globe Staff  File

Still, hiring has accelerated since last summer, a development that has surprised economists because hiring typically slows when unemployment is so low.

A broader measure of unemployment, which includes people who want to work but have given up searching and those working part-time because they can not find full-time employment, jumped to an 11-month high of 8.1 percent in January from 7.6 percent in December.

"It's the very strength of that economy and the abundance of job openings that is pulling more individuals back into the labor force", Jim Baird, partner and chief investment officer for Plante Moran Financial Advisors, said in a note.

"The respectable employment data provides something of a relief, for now at least, for members of the Federal Reserve who have been bracing for the possibility of a more serious slowdown in the US economy", said Mark Hamrick, a senior economic analyst at Bankrate.com. The U.S. Labor Department reports that non-farm payrolls surged by 304,000 last month.

In retail trade, employment ticked higher by 21,000, with growth in sporting goods as well as miscellaneous store and non-store retailers.

Economists polled by Reuters had forecast payrolls increasing by 165,000 jobs in January.

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




The number of jobs in retail increased by 21,000 at a time when the sector in the United Kingdom is faltering. Average hourly earnings in the leisure and hospitality sector have risen almost 4% over the past year, compared to 3.2% for the workforce as a whole. There were no discernible impacts of the partial federal government shutdown on the estimates of employment, hours, and earnings from the establishment survey. So some furloughed workers classified themselves as "employed" while others said (correctly) that they were "unemployed temporarily". Of those, 175,000 were counted as unemployed in the Bureau of Labor Statistics survey.

"They've enjoyed two decades of minimal pay growth in general", she said. Nevertheless, the final January data should continue to reflect a healthy labor market. The nonpartisan Congressional Budget Office estimates that the shutdown slowed annual growth for the January-March quarter by about 0.4 percentage point, to a rate of 2.1 percent, though that loss should lead to a bounce-back later this year.

The data comes after the US Federal Reserve made a decision to suspend its policy of raising interest rates.

The Fed on Wednesday kept interest rates steady but said it would be patient in raising borrowing costs further this year. December's gain of 312,000 jobs was knocked down to 222,000, the largest revision since November 2014.

The US economy created 304,000 jobs in January, solidly beating expectations amid the federal government shutdown. Builders added 52,000 jobs, the most in almost a year.

In January, 1.6 million persons were marginally attached to the labor force, essentially unchanged from a year earlier.

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