WASHINGTON–The U.S. economy added a robust 353,000 jobs in January, nearly double the expectations of analysts, with one credit union economist noting wage increases are also strong.
The new data from the Labor Department show the unemployment rate in January held steady at 3.7%, with wages also outpacing expectations, jumping 4.5% last month from a year earlier, though hours worked dropped—which could be an indication of bad winter weather, according to some analysts.
America’s CUs’ Economist’s View
“The U.S. economy added 353,000 jobs in January, almost twice the size of consensus expectation. Upward revisions for the previous two months and annual seasonal adjustment by the Bureau of Labor and Statistics for last year also indicate that the labor market was stronger than previously reported,” said Dawit Kebede, senior economist with America’s Credit Unions. “Average hourly earnings increased by 4.5% year-over-year, indicating positive real wage growth that will support consumer spending and economic growth. However, the wage increase is higher than the equilibrium point consistent with a 2% inflation target."
The new numbers stunned many. The Wall Street Journal noted, for instance, that its survey of economists prior to release of the new employment figures found most expected the economy to add 185,000 new jobs.
How Numbers Affect Fed
“Friday’s payroll report likely keeps the Fed on track to hold interest rates steady near a 23-year high at its next meeting, March 19-20, as officials wait for more evidence that a recent trend of lower inflation continues,” the Journal reported.
The report added that while initial claims for unemployment have jumped recently as the result of layoffs, there appears to be sufficient demand for workers to pick up the slack.