US job market closer to full health
Print Edition
US employers added a vigorous 257,000 jobs in January, and wages jumped by the most in six years — evidence that the US job market is accelerating closer to full health.
The surprisingly robust report the Labor Department issued yesterday also showed that hiring was far stronger in November and December than previously thought. Employers added 414,000 jobs in November — the most in 17 years. Job growth in December was revised sharply higher to 329,000 from 252,000.
Average hourly wages soared 12 cents in January to US$24.75, the biggest gain since September 2008. In the past year, hourly pay has risen 2.2 percent. That is ahead of inflation, which rose just 0.7 percent in 2014.
The unemployment rate last month rose to 5.7 percent from 5.6 percent. But that occurred for a good reason: More Americans began looking for jobs, though not all of them found work. Their job hunting suggests that they are more confident about their prospects.
“For the average American, it’s certainly good news — 2015 is going to be the year of the American consumer,” said Russell Price, senior economist at the financial services firm Ameriprise. “With job growth being strong, we’re going to see a pickup in wages and salaries.”
A sharp drop in gas prices has held down inflation and boosted Americans’ spending power. Strong hiring also tends to lift wages as employers compete for fewer workers.
Job gains have now averaged 336,000 a month for the past three months, the best three-month pace in 17 years. Just a year ago, the three-month average was only 197,000.
The stepped-up hiring in January occurred across nearly all industries. Construction firms added 39,000 jobs, and manufacturers 22,000. Retail jobs jumped by nearly 46,000. Hotels and restaurants added 37,100, health care 38,000.
The Federal Reserve is closely monitoring wages and other job market data as it considers when to begin raising the short-term interest rate it controls from a record low near zero. The Fed has kept rates at record lows for over six years to help stimulate growth. Most economists think the Fed will start boosting rates as early as June.
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