Recovery on best stretch of job data in 17 years
Employers in the U.S. added more jobs than forecast in January, capping the biggest three-month gain in 17 years, and workers’ earnings jumped.
The 257,000 advance in payrolls last month followed a 329,000 gain in December that was bigger than previously reported, figures from the Labor Department showed Friday in Washington. The median forecast in a Bloomberg survey of economists called for a 228,000 increase. The unemployment rate climbed to 5.7% as the improving job market lured more Americans into the labor force.
A stronger economy has encouraged companies to boost hiring, creating a virtuous cycle of growth as Americans spend newfound incomes on goods and services. Sustained job growth will probably help assure Federal Reserve policy makers that the expansion is well-rooted and can withstand an increase in interest rates later this year.
“These are pretty amazing numbers,” said Nariman Behravesh, chief economist at IHS Inc. in Lexington, Massachusetts, and the top forecaster of payrolls over the last two years, according to data compiled by Bloomberg. “The January number is strong, but then you’ve got sizzling November and December numbers too. And then you’ve got the wage gains.”
Average hourly earnings jumped 0.5%, the most since November 2008, from the prior month. They were up 2.2% over the past year, the biggest advance since August.
Treasury yields and stock-index futures rose after the report. The yield on the benchmark 10-year note climbed to 1.9% from 1.82% late on Feb. 5. The contract on the Standard & Poor’s 500 Index maturing in March advanced 0.3% to 2,061.5 at 9:07 a.m. in New York.
Payroll gains averaged 336,000 over the last three months, the strongest since a comparable period ended in November 1997.
A striking aspect of the report was an upward revision to prior months. Revisions to prior reports added 147,000 jobs to payrolls in the previous two months, which also incorporated adjustments back to 2010.
Employment in November was revised up to a 423,000 gain, the most since May 2010. Private payrolls, which exclude government agencies, soared 414,000 that month, the biggest advance since September 1997.
Estimates in the Bloomberg survey of 98 economists for payrolls last month ranged from increases of 180,000 to 286,000.
To calculate the data, the Labor Department surveys businesses and households for the pay period that includes the 12th of the month.
The agency’s survey of households, used to derive the unemployment rate, showed about 1.05 million people entered the labor force and 759,000 found work. These numbers also reflect new estimates on the size of the population.
The participation rate, which indicates the share of working-age people in the labor force, increased to 62.9% from 62.7% in December.
Private hiring increased by 267,000 in January after an advance of 320,000 the month before. Employment at retailers climbed about 46,000 last month, while payrolls in health care and social services rose by almost 50,000.
Sophie Dejonckheere, a 30-year-old graduate student at Columbia University, started a full-time job last week with a Paris-based research group that helps financial institutions line up their investment decisions with climate goals. Over the next six months she’ll be opening the group’s New York office, with an option for the position to turn into a permanent one at the end.
“I wanted to be able to leverage my skills that I’d already built up in the first six years of my career and build on that with this new expertizes that I developed,” said Dejonckheere, who previously worked in international development consulting. It’s been essential to network to find the right jobs, she said.