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A robust job gain in January shows US economy's durability

03 February, 2019, 19:53 | Author: Sara Gill
  • An employment sign hangs from a wooden fence on the property of a McDonald's restaurant Thursday Jan. 3 2019 in Atlantic Highlands N.J

Last month, the economy of the United States of America added more than 300,000 jobs despite the U.S. government shutdown.

Gains occurred in a number of sectors: Leisure and hospitality added 74,000 jobs, construction 52,000, health care 42,000, retail almost 21,000 and manufacturing 13,000.

Private economists had expected an increase of about 170,000 jobs and the unemployment rate to be unchangedat 3.9 percent.

The positive payroll numbers were somewhat mediated by revisions to previous months that shaved off 70,000 jobs.

Data from the employment site Glassdoor shows that the number of job postings rose almost 9 percent in late January compared with a year earlier, suggesting that demand for labor remained strong.

January marks the 100th straight month of job growth in the US, a record more than twice as long as the previous one of 48 months set in June 1990. The latter translates to an annual rate of 4.9 percent (and up 3.2 percent from December 2017). The central bank, which raised rates four times a year ago, did not raise rates and cited "global economic and financial developments" and low US inflation as reasons to be patient before changing rates again. Workers have seen a streak of relatively robust gains as employers have had to pay more to attract them. There were over 5.4 million Americans in January who would want a job, but weren't looking for one, many for reasons such as illness, school attendance, or family responsibilities.


China's economy is decelerating sharply and Italy's economy has entered recession, exacerbating fears that slower global growth will cut into USA exports. It didn't affect the numbers because of some technicalities of who the government considered unemployed in January. But the longest shutdown in history, which ended a week ago, pushed up the unemployment rate to a seven-month high of 4.0 percent. They are counted as employed because they will receive back pay for the period. They were not included in the unemployment rate, either.

The rate of unemployment rose up to four percent - from the 3.9 percent that was recorded last December - as did the number of people that are unemployed, increasing to 6.5m.

The manufacturing sector added 13,000 jobs in January, making its 12-month total 261,000.

"This is the sweet spot for investors right now", Long said.

Employment in leisure and hospitality rose by 74,000.

That increased the size of the labor force, driving the closely watched labor force participation rate up to 63.2 percent, its highest level in more than five years. The actual number of 304,000, 1.8 times the estimate.

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