US employers add 225,000 jobs; unemployment ticks up to 3.6%
Friday, February 07, 2020
In January, U.S. nonfarm payrolls grew by a total of 225,000 after December’s gain of 145,000, while the rate of unemployment rose to 3.6% from 3.5% the previous month, according to the Bureau of Labor Statistics.
In 2019, the average monthly gain of jobs was 175,000. The total number of unemployed persons rose to 5.9 million in January from 5.8 million in December.
January’s data showed that unemployment among major worker groups experienced little or no change versus December’s numbers. The average workweek for all employees on private nonfarm payrolls remained at 34.4 hours in January, matching December’s metric, according to the BLS.
January’s total of long-term unemployed (those without a job for 27 weeks or more) was 1.2 million, unchanged from December’s figure. Average hourly and weekly earnings of production and nonsupervisory employees on private nonfarm pay, seasonally adjusted, was $23.87 an hour in January versus $23.84 in December.
Wage growth has been a bit of mixed bag, as January marked the 23rd straight month of an unemployment rate at 4% or lower. A falling number of job seekers can drive up hourly pay as employers bid up wages to attract new hires.
“Nominal wages rose 3.1% year-over-year in January, likely reflecting the increases in state and local minimum wages that took effect in January,” said Elise Gould, an economist with the Economic Policy Institute in Washington, D.C., in a statement.
“Overall, wage growth is still slower than expected in an economy that has had historically low unemployment and remains the most important indicator to watch in 2020.”
In January, medium-sized business of 50-499 employees had the most new hires with 128,000 versus 88,000 in December, according to the Automatic Data Processing National Employment Report, produced from ADP payroll data in conjunction with Moody’s Analytics. Small firms of 20-49 employees had 94,000 new workers in January compared with December’s 69,000. Large firms of 500 or more employees hired 69,000 new employees versus 45,000 in December.
“Job creation was strong among midsized companies, though small companies enjoyed the strongest performance in the last 18 months,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute.
According to the ADP/Moody’s report, the service-providing sector had 237,000 new hires in January compared with 173,000 in December. Meanwhile, the goods-producing sector gained 54,000 new hires in January from 29,000 jobs in December. In January, construction firms gained 47,000 new employees after adding 37,000 in December. Manufacturing gained 10,000 jobs in January after losing 7,000 in December.
Earlier this week, Commerce Secretary Wilbur Ross said that the lethal coronavirus that began in China and has spread to nearly two dozen countries could “help to accelerate the return of jobs to North America.” How that scenario could play out is unclear.
The impacts of the coronavirus on U.S. businesses and their customers are unknown at best. China is a large market for some American employers, and a major exporter of goods to stateside firms and consumers.
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