WASHINGTON: US employers kept their doors wide open for new hires in January, capping a three month surge that saw a stunning one million jobs created across the country.
A better than expected January total of 257,000 net new jobs made for the best hiring over three months since 1997, with a broad range of industries expanding payrolls despite the mid winter economic slowdown.
The Labor Department’s January employment report released Friday also showed a modest gain in wages, and while the unemployment rate edged up to 5.7 percent from 5.6 percent, analysts said that related more to a jump in returnees to the labor force a positive sign.
With the economy marking the 11th straight month of 200,000-plus jobs added, “This was another incredibly strong employment report for the US,” said Harm Bandholz of UniCredit.
Most economists said the fresh data showed real signs of the economy gaining traction after a bumpy 2014 during which it grew a modest 2.4 percent.
US markets took the report as good news at first, but a bout of profit taking at the end of Friday’s session left the S&P 500 and the Dow Jones Industrial Average both down by 0.34 percent.
The dollar surged more than one percent to $1.1322 per euro and to 118.97 yen, and US Treasury bond yields rose sharply.
There were weaknesses in the numbers, to be sure: Most of the new jobs were still low-wage positions and the number of long term unemployed rose.
Meanwhile an increase in wages a data point watched as a crucial sign of labor market tightening was still only slightly above the inflation trend.
After falling in December, hourly wages gained 12 cents, or 0.5 percent, to $24.75. Year on year the increase was 2.2 percent.
While the rise was encouraging, economists said the wage movements over the past year were still too inconsistent to declare that American workers’ paychecks are firmly on the rise.
“The labor market is not yet tight enough to produce substantial wage growth, which means that future consumption growth will be limited,” said Dean Baker of the Center for Economic and Policy Research.