US Jobless Rate Hits Eight-Year Low
The January labour market survey was very mixed, though the headline payrolls figure was on the soft side, at only 151,000, with downward revisions to the previous months data (262,000 down from 292,000).
But aside from this, the report wasn’t all that bad. The household survey registered an eye-popping and rather improbable 615,000 increase, which added to the 485,000 gain in December suggests more than 1.1 million jobs were created in the last two months. That takes some swallowing, but helped to push the unemployment rate down a further notch to 4.9%, the lowest in almost eight years.
But adding to the sense that this is a mixed, rather than bad reading, both hours worked and average earnings also came in on the stronger side, with some upwards revisions on the wages side.
It is difficult to see exactly what the Fed will make of this. But with global financial conditions tightening, this release says “more data needed” before drawing any firm conclusions about any shift in Fed policy. That does at least suggest that a March hike remains off the table. And hopefully by then, we will have a better idea of whether things are really slowing, with no further hikes possible, or whether recent data were just a soft patch and the Fed can resume tightening later in the year.
Several industries took on more staff last month, says the Bureau of Labour Statistics.
Here’s a breakdown of where new jobs were created in January:
The retail sector: +58,000 jobs,
Employment in food services and drinking places: +47,000.
Health care: +37,000
Manufacturing: +29,000 jobs in January
Financial activities: +18,000.
But, employment declined in private educational services, transportation and warehousing, and mining.