US employers ramped up hiring in January and wage gains rebounded, providing fresh evidence of a durable jobs market that backs the Federal Reserve’s decision to stop cutting interest rates and hands President Donald Trump an early election-year boost.
Payrolls increased by 225,000 after an upwardly revised 147,000 gain in December, according to a Labor Department data Friday that topped all estimates of economists. The jobless rate edged up to 3.6 per cent, still near a half-century low, while average hourly earnings climbed 3.1 per cent from a year earlier.
The dollar maintained gains, yields on the 10-year Treasury were lower and US stocks declined from a record high as investors remained focused on the potential economic fallout from the coronavirus that has now claimed more than 600 lives.
Annual revisions to historical data took some shine off one of Trump’s main bragging points, cutting the 2018 job gain to 2.31 million from 2.68 million. The 2017 and 2019 gains were about 2.1 million, meaning each year under Trump — while still strong — has been slightly slower than the 2.35 million rise in the final year of the Obama administration.
Despite the revisions, the report shows the economy has retained strength, which Trump has heralded as a key tenet of his re-election campaign and this week in his State of the Union address. The solid hiring defies expectations for a step down to a slower pace of job growth as businesses delay investment, and exceeded the 175,000 average monthly gain for 2019.
The pace also supports Fed policy makers’ view of the labour market as strong, and is more than sufficient to keep up with population growth. At the same time, Boeing Co.’s halt on production of the troubled 737 Max airplane and fears of the coronavirus spreading are likely to weigh on the US economy in coming months.
Average hourly earnings rose 0.2 per cent from the prior month, slightly less than estimated but an acceleration from the December reading.
Payroll gains were broad-based and topped the median estimate for 165,000. Education and health services employment added 72,000, while transportation and warehousing rose by the most in a year.
In a positive sign, the participation rate, or share of working-age people in the labour force, increased to the highest since 2013. For prime-age Americans, age 25 to 54, the rate climbed to an 11-year high.