Tuesday 26 May 2020

Strong US jobs may spur Fed action

WASHINGTON, February 7, 2015

US job growth rose solidly in January and wages rebounded, a show of economic strength that put a mid-year interest rate increase from the Federal Reserve back on the table.

Non-farm payrolls increased 257,000 last month, the Labour Department said yesterday, outstripping Wall Street forecasts.

Data for November and December was revised to show a whopping 147,000 more jobs created than previously reported, bolstering views consumers will have enough muscle to carry the economy through rough global seas.

At 423,000, November's gain was the largest for any month since May 2010, when employment was boosted by government hiring for a national census. Over the past three months, more than one million jobs have been created, the first time that milestone has been reached since late 1997.

January marked the 11th straight month of job gains above 200,000, the longest streak since 1994.

Sputtering growth overseas and lower oil prices have weighed on US exports and business investment, but the jobs report suggested the economy continued to be a bright spot in an otherwise gloomy world.

Wages increased 12 cents last month after falling five cents in December. That took the year-on-year gain to 2.2pc, the fastest since August, but still below where Fed officials would like to see it.

The US central bank, which has held benchmark borrowing costs near zero since December 2008, ramped up its assessment of the labour market last week, and economists said the jobs data raised the prospect it would push rates higher this summer.

In addition to the firmer wages and job growth, the labour force participation rate, or the share of working-age Americans who are employed or at least looking for a job, rose two-tenths of a percentage point to 62.9pc.

The employment-to-population ratio rose to 59.3pc from 59.2pc in December.

But a broad measure of joblessness that includes people who want to work but have given up searching and those working part-time because they cannot find full-time employment rose to 11.3pc from 11.2pc in December.

In January, private payrolls increased by 267,000, while November and December private employment was revised higher.

The manufacturing sector added 22,000 jobs last month, while construction payrolls increased 39,000. Oil and gas extraction employment, however, fell 1,900 last month, reflecting layoffs connected to lower oil prices.

Retail employment increased 45,900 after braking sharply in December. Government payrolls fell 10,000, while transportation employment dropped 8,600, the first decline since last February.-Reuters

Tags: US jobs |


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