United States: Payrolls strong again in January but unemployment ticks up to 5.7% on increased participation
February 6, 2015
Non-farm payrolls grew by 257,000 in January, which was below December’s upward revised increase of 329,000 (previously reported: +252,000). However, the reading overshot market expectations of a 230,000 increase in payrolls and marked the 11th consecutive month of gains above 200,000.
The private sector was entirely responsible for new hiring, having added 267,000 jobs in January. The largest gains were registered in retail, health and education services, professional and business services, and construction. The public sector shed 10,000 jobs. The U.S. economy now has 2.5 million more people employed than at the pre-crisis January 2008 peak.
The unemployment rate—derived from a different survey—edged up from 5.6% in December to 5.7% in January. The market had expected the unemployment rate to hold at 5.6%. Despite the small uptick, the participation rate increased from 62.7% in December to 62.9% in January. Analysts point out that the return of previously discouraged workers to the labor force is a positive sign as it suggests that workers are more confident and have better perceptions of the economy. While average hourly earnings picked up slightly in January, wage growth has been largely stagnant over the past months.
Author: Carl Kelly, Economist