The US saw another month of strong jobs growth in January, extending a streak of gains that has surprised many economists. The US Labor Department said employers added 225,000 positions last month, while wages rose 3.1% year-on-year.
Hiring at construction firms helped to drive the gains, as milder weather allowed for more building. The unemployment rate edged up to 3.6%, but that was largely due to more Americans looking for work, reports BBC.
“The hard data have outperformed substantially in recent months and show no signs yet of fading,” said Ian Shepherson, chief economist at Pantheon Macroeconomics.
The US is growing at an annual rate of about 2.1% – similar to previous years – but steady gains in the labour market keep the economy on track, despite trade tensions and weakness abroad,
Consumer confidence is on the rise and near record numbers of Americans are reporting satisfaction with their personal finances.
US President Donald Trump, who is up for re-election this year, made the strength of the economy a central part of his recent State of the Union address. Many analysts say it is likely to help him in his campaign.
Economists attribute the gains to the US central bank’s decision to cut interest rates last year.
But gains could slow in coming months. Business investment has been weak and the manufacturing sector – which is often viewed as an indicator of future trends – shed 12,000 jobs in January.
Revisions to prior reports also found that the US 514,000 fewer jobs were created between April 2018 and March 2019 than originally estimated. That marked the biggest statistical downgrade since 2009.
“Today’s numbers beat expectations, and the Fed’s recent decision to hold rates steady seems justified in the face of rising job numbers, low unemployment and mild wage growth,” said Richard Flynn, UK managing director at stockbroker Charles Schwab.
“However, with concerns around the coronavirus intensifying, continued trade talks and Brexit negotiations at play, investors should remain cautious of evident risks to the stock market in the near-term.”