U.S. Economy Added 225,000 Jobs in January - The Wall Street Journal

U.S. Economy Added 225,000 Jobs in January - The Wall Street Journal

The U.S. economy added an average 211,000 jobs over the past three months.

Photo: Lynne Sladky/Associated Press

By

Sarah Chaney

Sarah Chaney
The Wall Street Journal
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• sarah.chaney@wsj.com

Updated Feb. 7, 2020 7:32 pm ET

U.S. hiring strengthened in January as more Americans hopped into the labor market, helping rev up the economy at the start of the year.

Employers added 225,000 jobs last month and the unemployment rate ticked up to 3.6% from 3.5% in December, an increase that reflected more people looking for work, the Labor Department said Friday.

Wages climbed 3.1% from a year earlier, a touch stronger than December’s rise of 3%.

“The labor market and the consumer are the strength of the economy and they’re in good shape,” said Eric Winograd, senior economist at AllianceBernstein.

Some of the January job gains came in industries, such as construction and leisure and hospitality, that benefited from mild winter weather. Still, employers across an array of sectors added jobs. That helped lift monthly payroll growth for the past three months to an average of 211,000 jobs, compared with an average of 175,000 for all of last year.

Robert Jones, president of American Sale, an Illinois-based retailer of home-recreation goods such as trampolines and hot tubs, said his 200-person company will add about 20 workers this year. He expects a low unemployment rate and solid economy to help spur purchases of big-ticket items.

“When you have more demand, you have more to do, so you just need more people,” Mr. Jones said.

Companies are drawing from a larger pool of job seekers to fill roles. In January, the share of Americans aged 25 to 54 working or looking for work ticked up to 83.1% from 82.9% in December, the highest rate since 2008.

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A larger flow of workers into the labor force could be keeping wages from breaking out. In January, the average hourly earnings growth of 3.1% stayed within the relatively narrow range of the past year and a half. Wage growth for rank-and-file workers cooled to 3.3% in January, down from a recent peak of 3.8% in October.

“Even the modest increase in wages appears to be enough to draw back workers into the labor force,” Mr. Winograd said.

Americans are less likely to feel the pinch from limited pay increases because inflation has been modest. December consumer prices excluding food and energy increased 2.3% from a year earlier, slightly higher than in 2018 but down from 2.4% in September.

A strong labor market should help propel the broader economy as more Americans have jobs and money to spend. Consumers helped drive the economy in 2019, which closed the year growing at a modest pace.

The Federal Reserve left its benchmark interest rate unchanged at its meeting last week, after cutting interest rates three times last year to buffer the economy against slowdowns in trade and manufacturing. January’s employment report will offer Fed officials comfort in their wait-and-see approach to interest-rate moves.

Solid hiring has been a hallmark of the economic recovery of the past decade. U.S. employers have added to payrolls for 112 straight months, the longest streak of job gains on record.

Ace Sign Co., a 65-person Springfield, Ill.-based manufacturer of building signs, awnings and displays, is in hiring mode. Todd Bringuet, the company’s chief executive, said he is looking to fill four positions to meet client demand. He said he is confident about his ability to hire.

Ace Sign has been able to spot engineering and technical talent through recruitment efforts at technical schools and has also seen increased interest from candidates in larger cities such as Chicago who are searching for quicker commutes and a lower cost of living, Mr. Bringuet said.

“We’ve had positions where I’ve had 200 applicants in a three-day period, and that was a little overwhelming,” Mr. Bringuet said.

New risks to the economic outlook have emerged in recent weeks. Boeing Co. halted production of its troubled 737 MAX aircraft, an impediment to manufacturing output that is expected to reduce first-quarter U.S. growth. The coronavirus outbreak that originated in China could hinder a rebound in global manufacturing activity.

The rising number of confirmed coronavirus cases has worried some investors. Last week, the benchmark 10-year Treasury yield fell below 1.6%, its lowest level since October.

Major U.S. stock indexes had recouped their steep losses from last week, rising in recent days to close at records Thursday. On Friday, the Dow Jones Industrial Average slipped 277 points, or 0.9%. The S&P 500 and the Nasdaq Composite each fell 0.5%.

Annual revisions released in Friday’s jobs report showed the overall employment level for March 2019 was revised down by 514,000 jobs to 150.28 million. For all of 2019, employers added 2.096 million jobs, a downward revision of 12,000.

More

• Americans Joining Workforce at Record Rate
• Data Likely to Comfort Fed Officials
• Heard on the Street: A Hot, but Not Overheated, Jobs Report
• See the Full Labor Department Report
• Keep Up to Date With the WSJ Real Time Economics Calendar

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Write to Sarah Chaney at sarah.chaney@wsj.com

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2020-02-08 00:32:00Z
https://www.wsj.com/articles/january-jobs-report-11581076802
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