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- The US labor market entered 2020 on a stronger-than-expected note, adding jobs for a record 112th month.
- The Bureau of Labor Statistics said Friday 225,000 nonfarm payrolls were created in January, compared with economist forecasts for 165,000.
- Average hourly earnings picked up to 3.1% from a year earlier, compared with 2.9% in December.
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The US labor market entered 2020 on a stronger-than-expected note, adding jobs for a record 112th month.
The Bureau of Labor Statistics said Friday 225,000 nonfarm payrolls were created in January, compared with economist forecasts for 164,000. The unemployment rate edged higher to 3.6%, still near its lowest level in half a century.
Average hourly earnings picked up to 3.1% from a year earlier, compared with 2.9% in December. While wage growth has continued to outpace inflation, it has held below the pace economists would hope for with historically strong employment levels.
The report also included major revisions to data for 2018 and 2019, offering a more accurate picture of the labor market. Employers added about a half a million fewer jobs in 2018 and early 2019 than initially thought, in line with estimates released in August.
“The job market is strong, but not nearly as strong as thought,” said Mark Zandi, the chief economist at Moody’s Analytics. “This revision is well-anticipated so likely won’t impact financial markets, but it may change perceptions regarding the strength of the labor market.”
Still, the revisions were relatively small for an economy with over 150 million total jobs. To keep up with the pace of population growth, the US needs to add roughly 100,000 payrolls per month.
Low unemployment and faster wage gains were able to pull Americans from the sidelines at the fastest pace of the recovery last month. The labor-force participation rate rose to 63.4% in January, though that figure is still low compared with those of global peers.
“It’s clear that plentiful work opportunities are enticing more people to enter, or in some cases re-enter, the labor market,” said Jason Pride, the chief investment officer of private wealth at Glenmede.
Employers entered 2020 on steadier footing than a year earlier as consumer confidence climbs to historic highs and Americans continue to spend at a robust pace. With the economy expected to grow at a solid but slower pace this year, the Federal Reserve has signaled it would hold interest rates steady after three cuts last year.
But the central bank said this month it would closely monitor a rapidly spreading coronavirus in China, which has brought the second-largest economy to a near standstill and disrupted global supply chains. Analysts and officials have said the outbreak could stall efforts to defuse a bruising trade dispute between the US and China, which has raised costs for employers and clouded the investment outlook.
“The January jobs report does not fully account for the impact of the coronavirus outbreak in China, which is disrupting global flows of goods and people and will likely be a drag in coming months on trade-exposed industries like manufacturing,” said Daniel Zhao, a senior economist at the career site Glassdoor.
This story is developing. Please check back for updates.