By Paul Davidson, USA Today–
Hiring picked up in January as employers added 225,000 jobs and the labor market continued to defy worker shortages and a slowing economy.
The unemployment rate rose to 3.6% from a 50-year low of 3.5%, but that’s largely because more Americans joined the labor force, which includes those working and looking for jobs, the Labor Department said Friday.
The number of jobs gained from March 2018 to March 2019 was revised down by a whopping 514,000, slightly more than a preliminary estimate last summer.
Some economists expected mild weather to boost payroll gains in industries such as construction and leisure and hospitality. Goldman Sachs reckoned that dry weather in the Northeast and Ohio would lift job gains by as much as 30,000. Nomura anticipated a bump from unseasonably warm temperatures. Construction led the job gains with a healthy 44,000.
And with low unemployment spawning more worker shortages, Goldman believed that employers likely laid off fewer employees at the end of 2019, boosting payrolls in January.
Meanwhile, government hiring for the 2020 Census is expected to ramp up later this year but could have added up to 9,000 temporary jobs last month, Morgan Stanley said.
The bigger picture is that job growth is forecast to throttle back this year as the economy slows and low unemployment makes it even harder for businesses to find workers. Although U.S. trade deals with China, as well as Canada and Mexico, have eased business uncertainty, other trade fights with China and Europe still loom, adding to mounting concerns about the economic effects of the coronavirus and persistently sluggish global growth.
After job gains averaged about 175,000 jobs a month in 2019, many economists expect monthly increases of just over 100,000 this year.
Wage growth ticks up
Average hourly earnings increased 7 cents to $28.44, bumping up the annual gain from 2.9% to 3.1.
Pay increases have moderated after reaching 3.5% in late 2018 but have hovered around 3%, surprising some analysts who expected sharper gains as the unemployment rate has fallen.
The measured increases have helped hold down inflation, allowing the Federal Reserve to cut interest rates three times last year and keep rates low in 2020.
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Industries that are hiring
Besides the strong gains in construction, health care and leisure and hospitality each added 36,000 jobs; transportation and warehousing, 28,000; and professional and business services, 21,000.
Manufacturing cut 12,000 jobs in a sign the industry continues to struggle amid sluggish growth overseas and U.S. trade conflicts. A report this week showed manufacturing activity expanding last month for the first time since July, raising hopes of a turnaround after the Trump administration reached trade agreements. But the coronavirus and a halt to production of Boeing 737 MAX airliner after two fatal crashes are likely to continue to leave a cloud of uncertainty over the industry in the months ahead.
Labor force participation at 7-year high
The share of Americans working or looking for jobs rose from 63.2% to 63.4%, the highest level since June 2013. The favorable labor market has provided workers more leverage and bumped up their pay, drawing more Americans on the sidelines — including those with fewer skills and disabled people — into the job market. That’s a positive for the economy but the surplus labor supply could be keeping wages from climbing more rapidly.
This article originally appeared on USA TODAY: Economy added a robust 225,000 jobs in January, defying worker shortages