The U.S economy added 257,000 jobs in January, beating expectations and building on the strong gains from the end of 2014.
It’s a slight slowdown from the previous two months, but the report indicates that solid growth is continuing and the overall pace of the recovery is gaining steam.
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The unemployment rate rose slightly to 5.7%, up 0.1% from the previous month, but that it’s partly because more Americans are getting off the sidelines and looking for work. The labor force participation rate in January ticked up by 0.2 percentage points to 62.9% after a previous decline.The report also contained major upward revisions to the jobs numbers at the end of 2014. November’s blockbuster job growth was revised from the 353,000 initially reported to 423,000. December’s numbers were revised up from 252,000 to 329,000.
Wages also picked up in January, fueling optimism that a tightening labor market would finally put upward pressure on earnings. Average hourly wages rose 12 cents in January to $24.75, after declining 5 cents in December. It’s the largest monthly wage gain since November 2008.
“This is a solid start to the New Year, and could be a sign that the economy has shifted into a slightly higher gear,” said Elise Gould of the Economic Policy Institute.
Jobs gains were distributed across a wide range of industries—with significant increases in construction, manufacturing, financial activities and retail—suggesting that the employment growth is broad-based and headed in the right direction. January marks the 59th straight month of job growth, continuing the longest streak on record.
The strong jobs report may fuel concerns about the timing of Federal Reserve’s anticipated rate hike later this year. The Fed has indicated that it would wait for further signs of accelerated economic growth before raising interest rates. Gould, however, believes that such a move would be premature.
“Nominal average hourly earnings grew 2.2% annually in January,” she said. “Wages need to grow faster, and for long time, before we can say the economy is truly working for working people—and before the Federal Reserve should think about tapping the brakes.”
Reaction from policy journalists and economists on social media was overwhelmingly positive.