Promising 2018 Start for U.S. Job Market
February 2018The beginning of 2018 has proved to be off to a good start in the U.S. job market. After a slight lull in December, nonfarm payroll increased by 200,000 in January surpassing original forecasts according to the Labor Department. The unemployment rate held at 4.1%, matching the lowest since 2000.
Breaking down January data, construction reported by the biggest gain by sector with 36,000; manufacturing also showed a gain of 15,000 and durable goods-related industries added 18,000. The focus on construction and manufacturing indicates a resurgence in factory activity and rebound in housing.
As the economy moves towards full employment, more companies are finding it harder to hire qualified candidates. In order to attract qualified workers companies are now increasing wages at a rate unseen since 2009. January experienced a 2.9% increase in wages, a sign that the booming economy is finally starting to reach American’s pocketbooks. Separate data released by the Bureau of Labor showed that private-sector wages and salaries rose 2.8% in the fourth quarter of 2017, compared to a year earlier.
Even claims for state unemployment benefits decreased 9,000 to a seasonally adjusted rate of 221,000. Last week marked the 153rd straight week that claims remained below the 300,000 threshold, which is associated with a strong labor market. That is the longest stretch since 1970 when the labor market was much smaller.
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