- The January employment gain reflected a sharp improvement relative to increases of 157K in December (156K previously) and 164K in November (204K previously). Market expectations had been for a more modest 175K gain in January.
- The more volatile household employment measure soared (on an adjusted basis) 457K though, with the labour force spiking higher by an even greater 584K, the unemployment rate unexpectedly rose to 4.8% from December’s rate of 4.7%.
The overall increase reflected an impressive 45K jump in goods-producing employment following the 15K increase in December. This largely reflected construction employment soaring 36K after a 2K gain in December. Manufacturing employment rose a modest 5K which was down from an 11K gain the previous month. Employment among service-producing industries rose 192K after the 150K gain in December.
Though the payroll employment gain implied strength in labour markets this was tempered by the rise in the unemployment rate. However, this rise resulted from a surge in the labour force which could imply optimism about the rising prospect of finding work. Also tempering the impression of tightening labour markets was the minimal 0.1% rise in average hourly earnings that fell well short of the 0.3% gain expected going into the report. The modest monthly increase contributed to the year-over-year rate dropping to 2.5% from the 2.8% that was recorded in December. Annual wage increases have generally been trending higher in recent years rising 2.1%, 2.3% and 2.6% between 2014 and 2016.