US Jobs Report: NFPs +200,000, Wages Rise Most Since 2009

US Jobs Report: NFPs +200,000, Wages Rise Most Since 2009

US Jobs Report: NFPs +200,000, Wages Rise Most Since 2009


  • “Jobs, Jobs, Jobs”

US job growth rose in January and wages increased too, recording their largest annual gainer in more than 8.5 years, bolstering expectations that inflation will push higher this year as the labor market hits full employment.

Remember, No inflation, No growth

NFPs (nonfarm payrolls) rose by 200,000 jobs last month after rising 160,000 in December, the US Labor Department said on Friday.

The unemployment rate was unchanged at a 17-year low of 4.1%. Average hourly earnings rose 9c, or 0.3% in January to $26.74, building on December’s solid 0.4% gainer.

That boosted the Y-Y increase in average hourly earnings to 2.9%, the largest rise since June 2009, from 2.7% in December.

Workers put in fewer hours last month. The average workweek fell to 34.3 hours, the shortest in 4 months, from 34.5 hours in December.

The robust employment report underscored the strong momentum in the economy at the start of the year.

Economists say job gains are being driven by buoyant domestic and global demand.

Given that the labor market is almost at full employment, economists saw little boost to job growth from the Trump administration’s $1.5-B tax cut package passed by the Republican-controlled US Congress in December, in the biggest overhaul of the tax code in 30 years.

US President Trump and his fellow Republicans have cast the fiscal stimulus, which includes a reduction in the corporate income tax rate to 21% from 35%, as creating jobs and boosting economic growth.

According to outplacement consultancy firm Challenger, Gray & Christmas, 7 companies, including Apple (NASDAQ:AAPL), had announced plans to add roughly a combined 37,000 new jobs in response to the tax cuts as of the end of January.

Economists polled by Reuters had forecast NFPs rising by 180,000 jobs last month and the unemployment rate unchanged at 4.1%. January’s anticipated jobs gains were above the monthly average of 192,000 over the past 3 months.

Further gains are expected in February when Walmart (NYSE:WMT) raises entry-level wages for hourly employees at its US stores. Annual wage growth is now close to the 3% that economists say is needed to push inflation towards the Fed’s 2% target.

Fed officials Wednesday expressed optimism that inflation will rise toward its target this year.

The FOMC voted to keep interest rates unchanged, have described the labor market as having “continued to strengthen,” and economic activity as “rising at a solid rate.” US financial markets are expecting a rate hike in March.

The Fed has forecast 3 rate increases this year. It raised borrowing costs 3X in Y 2017.


Have a terrific weekend.

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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