The unemployment picture improved in the United States during January with the creation of new jobs occurring at the fastest rate in more than two years.
The U.S. Labor Department reported Friday the jobless rate fell 0.3% to 5.7%, a four-month low. Non-farm payrolls added 143,000 jobs during the month, after falling 156,000 in December, the biggest increase in payrolls since November 2000.
"It is too soon to know how many of the newly created jobs in the January labor market report signal a continuation of the upturn in economic activity that began in December," said Newport Communications Senior Economist Jim Haughey. "Some of them may have been only a reversal of the equally unexpected 153,000 job loss in December. The January report reversed the 100,000-plus job decline a month earlier in the usually steady food service industry with little month-to-month change in most other industries.
According to Haughey, there were four signs that the labor market is improving. "Average weekly hours rose 0.1%, average weekly earnings increased 0.3%, aggregate payrolls were up 0.8% and the parallel survey of households -- notoriously volatile -- reported 1,097,000 more people employed," he said. This starts the current quarter with employment 0.2% above the fourth quarter average and probably assures that growth in the gross domestic product will recover to 2%-3% in the winter after slipping to 0.7% in the fall.
Haughey said employment is currently only 67,000 less than last January as the growth in demand was absorbed by the 4.7% rise in labor productivity, the highest since 1950. "Employment is not likely to show any significant gains until late in the year when demand growth picks up and productivity growth slips back to the 3% sustainable trend. But income growth will continue rising at 3% plus inflation due to wage increases. This assures continues modest spending and freight gains," he said.
The U.S. Labor Department reported Friday the jobless rate fell 0.3% to 5.7%, a four-month low. Non-farm payrolls added 143,000 jobs during the month, after falling 156,000 in December, the biggest increase in payrolls since November 2000.
"It is too soon to know how many of the newly created jobs in the January labor market report signal a continuation of the upturn in economic activity that began in December," said Newport Communications Senior Economist Jim Haughey. "Some of them may have been only a reversal of the equally unexpected 153,000 job loss in December. The January report reversed the 100,000-plus job decline a month earlier in the usually steady food service industry with little month-to-month change in most other industries.
According to Haughey, there were four signs that the labor market is improving. "Average weekly hours rose 0.1%, average weekly earnings increased 0.3%, aggregate payrolls were up 0.8% and the parallel survey of households -- notoriously volatile -- reported 1,097,000 more people employed," he said. This starts the current quarter with employment 0.2% above the fourth quarter average and probably assures that growth in the gross domestic product will recover to 2%-3% in the winter after slipping to 0.7% in the fall.
Haughey said employment is currently only 67,000 less than last January as the growth in demand was absorbed by the 4.7% rise in labor productivity, the highest since 1950. "Employment is not likely to show any significant gains until late in the year when demand growth picks up and productivity growth slips back to the 3% sustainable trend. But income growth will continue rising at 3% plus inflation due to wage increases. This assures continues modest spending and freight gains," he said.
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