Strong Job Growth In January
The US stock market opened flat on Friday, even as new data indicated January was a strong month for job growth.
Saturday, February 7, 2015 - 00:00
Additionally, wage growth could be on the rise as well, after a wave of hiring in the past year could be enough to push compensation higher after a long period of stagnancy.
Overall, employers created 257,000 new positions in January – better than most analysts’ estimate of a 230,000-job gain. That employment growth was not one-sided, either. Most industries added workers, including construction with 39,000 new jobs and health care with 38,000. For the first time since 1994-1995, the US economy has added at least 200,000 jobs for 12 consecutive months.
In more good economic news, hourly wages bounced back from a December downturn, increasing 0.5% during the month to reach $24.75 on average. Not only that, wages are now up 2.2% over the last 12 months – just shy of a post-recession high mark.
US stocks inched forward in early Friday trading, as the S&P 500 and Dow both gained just over 0.1%. The Nasdaq registered little movement in the first half-hour of the session.
The recovery is almost complete
Five years after the recession, the labor market is finally approaching full health, reported The Wall Street Journal. Economic growth in the US during 2014 was robust enough to allow employers to expand in the early-going of 2015. The growth in hourly earnings also suggests slack in the labor market is shrinking.
“Labor market conditions have improved further, with strong job gains and a lower unemployment rate,” the Federal Reserve said in its Jan. 28 policy statement. “On balance, a range of labor market indicators suggests that underutilization of labor resources continues to diminish.”
Should that assessment continue to hold up, the Fed would likely feel confident enough to raise interest rates on schedule – believed to be slated for the middle of the year. That move would signal the final step for the labor market to recover from the recession.
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