The Economy

Economy Adds 225,000 Jobs in January

Warm weather and an easing of trade tensions led to growth.
Lauren MuskettFebruary 7, 2020
Economy Adds 225,000 Jobs in January

The U.S. economy added 225,000 jobs in January, with mild weather and the easing of trade tensions helping to boost hiring, according to the Bureau of Labor Statistics. Economists surveyed by Dow Jones expected an increase of 150,000 and 160,000 jobs.

At the same time, unemployment rose to 3.6% as the labor force participation rate ticked up 0.2%, The unemployment rate ticked higher, to 3.6 percent, as the labor force participation rate rose by 0.2 percent.

The number of long-term unemployed, those jobless for 27 weeks or more, was unchanged in January at 1.2 million. These individuals accounted for 19.9% of the unemployed.

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The labor participation rate was 63.4%, the highest level since the June 2013.

“The report is unambiguously good,” said Ed Campbell, portfolio manager at QMA. “Strong growth and decent but not runaway wage growth should be good for stocks. Of course, we’ve had such a strong week, the markets are taking this in stride given how much we’ve been up so far.”

The real unemployment rate, which includes discouraged workers and those holding part-time positions for economic reasons, rose to 6.9%, a 0.2% increase.

Notable job gains occurred in construction, health care, and transportation and warehousing.

The construction industry added 44,000 jobs, the best-performing sector. The average for 2019 was 12,000.

Health care added 36,000 jobs in January, with gains in ambulatory health care services (23,000 added jobs) and hospitals (10,000 added jobs). Health care has added 361,000 jobs over the past 12 months.

Employment in transportation and warehousing increased by 28,000 in January. Job gains occurred in couriers and messengers (14,000 added jobs) and in warehousing and storage (6,000 added jobs). Over the year, employment in transportation and warehousing has increased by 106,000.

Total nonfarm employment fell 514,000 for the year ended March 2019, a downward revision from the 500,000 economists estimated in August.

Average hourly wages grew to $28.44, up 3.1% year-over-year. Economists estimated 3% wage growth.

The average work week remained unchanged at 34.3 hours.

“Weekly hours worked remain worryingly low,” said Julia Pollak, labor economist at online jobs marketplace ZipRecruiter. “That is a problem because many workers are struggling to find jobs that will schedule them to work enough hours so they can make ends meet. It could also be a sign that employers are concerned about the possibility that demand for goods and services might weaken in the coming months.”

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