US Employers Add 304,000 Jobs in January

Job seekers fill out applications at a job fair at the Denver Workforce Center in Denver

Average hourly earnings grew 3.2 percent over the past 12 months - topping the 3.2 percentincrease in December. Wages have risen by 3.2 percent since this time previous year.

What do the USA jobs numbers mean for Wall Street?

The Federal Reserve, which keeps a close eye on the employment numbers, said Wednesday that the labor market has continued to strengthen since December.

The report came two days after the Fed signaled its three-year interest rate hike campaign might be ending because of rising headwinds to the economy, including financial market volatility and slowing global growth. Notable gains occurred in the retail sector (21,000), transportation and warehousing (27,000), and education and health services (55,000).

The private sector economy kept on hiring in January despite the government shutdown that lasted 35 days. Professional and business services employment increased by 30,000 jobs last month. "I find it hard to believe there won't be some revision to this number next month".

The nonpartisan Congressional Budget Office estimates that the shutdown slowed annual growth for the January-March quarter by about 0.4 percentage point, to a rate of 2.1 percent, though that loss should lead to a bounce-back later this year.

"The January employment data depict a strong American economy", the White House said in response. One of them is the payroll survey, which measures hiring. It also incorporated new population estimates. It is calculated from the household survey (the one where the Labor Department goes door-to-door).

The gain of 304,000 jobs in January almost doubled consensus (165,000), but significant revisions to the January data seem likely. It also informs the headline earnings and hours worked data.

Different methodologies for these complementary reports treat similarly situated individuals differently in some circumstances.

The government shutdown saw about 380,000 workers furloughed but President Donald Trump signed a law guaranteeing these employees back pay.

Numerous remaining furloughed federal employees were classified as "employed but absent from work", so those employees were not counted in the unemployment rate. It would also count contractors who did not work during this period as unemployed. This boosted the unemployment numbers, but the federal employees' eventual return to work was not included as new jobs added. But it could show up in the unemployment rate, which is based on a survey of households rather than employers. "Employers are still actively looking for jobs, and with wages ticking up, it looks like workers are getting some more bargaining power".

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.

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