There was good news in January for people with jobs and those trying to find one.
The Bureau of Labor Statistics (BLS) reports the economy added 200,000 jobs last month while average hourly earnings rose a robust 2.9 percent, the biggest jump since the Great Recession. The nation's unemployment rate held steady at 4.1 percent.
"Wage increases may finally be accelerating," economist Joel Naroff, of Naroff Economic Advisors, told ConsumerAffairs. "Payroll gains in the 190,000 range, which we averaged for the past three months, are more than enough to put further downward pressure on the unemployment rate and labor availability and force firms to finally start making decisions on whether they are going to actually pay workers more or keep their newfound tax gains for equity owners and management.”
The entire report was better than expected. The jobs number was higher than consensus forecasts, while almost no one foresaw the dramatic leap in wages.
It's an abrupt departure from the last few years. Even as the economy recovered and the labor market tightened, employers seemed reluctant to hand out pay raises. However, a number of major employers began 2018 with announcements of employee bonuses due to the new corporate tax rate.
Perhaps also helping to boost wages, 18 states have higher minimum wage laws that took effect January 1.
When it comes to jobs, nearly all sectors showed strength in January. There were 36,000 new construction jobs while factories and other manufacturers added 15,000 workers.
The service sector showed the biggest increase, adding 139,000 employees. In spite of the normal January layoffs of seasonal employees, the retail sector added 15,000 jobs.
Even though the unemployment rate remains near historic lows, it doesn't mean everyone is working. The monthly employment report does not count those who have given up on finding a job.
The BLS report shows the labor force was little changed last month, with a participation rate of only 62.7 percent for the fourth straight month.
The number of people working part-time, but who want full-time employment, was essentially unchanged at five million.