By Thomas Cooley and Peter Rupert
The BLS announced that establishments added 225,000 jobs in January and also revised the previous two months up by 7,000 (November up 5,000 and December up 2,000). Just to be clear how difficult it is to forecast an economy, professionals predicted something like 160,000-170,000…off by, well, a lot. The average monthly gain in 2019 was 175,000. This was a strong beginning for 2020, only November (261,000) showed a larger increase in 2019 compared to today’s January numbers.
Employment in the private sector grew by 206,000 with the government adding 19,000. Construction was up 44,000 while manufacturing jobs declined by 12,000, with most of that in motor vehicles and parts, down 10,600.
The service sector added 174,000 jobs with health care and social assistance growing 47,200 and leisure and hospitality 36,000.
Average weekly hours stayed constant at 34.3 and average hourly earnings rose from $28.37 to $28.44, increasing 3.1% year over year.
Average hourly earnings ticked up slightly and year over year have gained just over 3%. Workers are gaining steadily in this labor market and are showing the confidence to exit existing jobs and search for new ones.
The household survey showed an uptick in unemployment from 3.50% to 3.60%. The labor force participation rate increased from 63.2% to 63.4% and the employment to population rate also increased, 61.0% to 61.2% underscoring the strength of the labor market.
The strong labor market supports the Fed’s stance to sit tight for now and let the economy continue to grow. Everyone expects the Coronavirus Outbreak and the extreme measures being taken to fight it to subtract from growth in the coming months but we don’t know how long lasting and disruptive the event will be. We just have to wait and see.
