United States: Labor market conditions improve marginally in January
Total non-farm payrolls increased a modest 49,000 in January, virtually meeting analysts’ expectations of a 50,000 increase. This follows December’s 227,000 fall in payrolls. Employment gains in professional and business services and education were somewhat offset by losses in leisure and hospitality, retail trade and health care.
The unemployment rate fell to 6.3% in January from 6.7% in December, but the labor force participation rate also inched down to 61.4% from 61.5% the month prior. Hourly earnings increased 0.2% month-on-month in January (December: +1.0% mom), while annual wage growth was stable at 5.4%.
Commenting on January’s jobs report and the short-term outlook on the labor market, Katherine Judge, a senior economist at CIBC Economics, noted:
“Things are looking up for the US economy from here, as Covid cases are trending lower and there looks to be another round of fresh fiscal stimulus on the way, which presents an upside risk to our forecast as some states move to loosen restrictions on activity. While there are certainly downside risks from fast-spreading new variants of the virus, the US is in the top three countries in terms of vaccines administered per 100 people so far.”