A robust job gain in January shows USA economy’s durability

A robust job gain in January shows USA economy’s durability

The Labor Department reported that 490,000 more people were working part-time in January but wanted full-time work, and the department noted that this "may reflect the impact of the partial federal government shutdown". Transportation, leisure and hospitality, construction and health care led the job gains.

Private economists had expected an increase of about 170,000 jobs and the unemployment rate to be unchanged.

Among the unemployed, the number who reported being on temporary layoff increased by 175,000, and that figure was shown to have included furloughed federal employees who were classified as unemployed on temporary layoff under the definitions used in the household survey.

Hourly pay grew a token 0.1 percent over December but was up 3.2 percent over January of previous year, well above consumer inflation of 1.9 percent in the same period, leaving American workers with greater purchasing power. According to the New York Times, the US economy has now added jobs for 100 consecutive months.

The unemployment rate has risen to 4 percent from 3.9 percent in December. Last week's applications for unemployment benefits came in at 253,000, above from the 49-year low hit earlier in the month but still low by historical standards.

Friday's solid jobs report provided a dose of reassurance that the economy remains mostly healthy and likely to shake off any effects of the shutdown. Specifically, the establishment survey will treat federal workers, irrespective of whether they were furloughed or working without pay, as having been employed. Since President Trump was elected in November 2016, the USA economy has created over 5 million jobs.

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How did the shutdown change the jobs report? It didn't affect the numbers because of some technicalities of who the government considered unemployed in January. Some 426,000 were discouraged workers, who weren't looking for work because they believed no jobs are available for them, based on the BLS survey. And so we'll have to wait to see more data.

The economy added 304,000 nonfarm payrolls at the start of 2019, bringing the labour market into a 100th straight month of job creation and compared with forecasts for increase of 165,000.

"This is the sweet spot for investors right now", Long said. Job growth around 120,000 is more than enough to keep the unemployment rate under 4%.

That increased the size of the labor force, driving the closely watched labor force participation rate up to 63.2 percent, its highest level in more than five years.

President Donald Trump, a cheerleader for good economic data, celebrated the numbers by posting a tweet on February 1: "JOBS, JOBS, JOBS!"

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