Wage Growth Speeds Up as Hiring Slightly Ebbs
Today's Labor Department employment report shows that 257K jobs were added to the US economy last month, with the unemployment rate inching up to 5.7% from 5.6%. The numbers were solid enough to maintain faith in a labor market rebound, but down from the sizzling pace of late 2014. On that note, December job gains were revised upward in the report to 329K from 252K.
In the fourth quarter of 2014, monthly job gains averaged over 290K. The slowdown, coupled with other indicators reported this week including slower-than-expected 4Q14 GDP improvement of 2.6% and a significantly widening trade deficit, put a slight damper on economic optimism. Today's report also followed news that the private sector grew at the slowest pace in four months. Yet the New York Times notes that January numbers are historically tough to decipher given winter doldrums and that they follow the holiday season retail hiring spike.
In unqualified good news, hourly wage growth jumped by 0.5% last month after a surprise drop in December. Wage improvement has become the stubborn Achilles' heel of the recovery, and this surge, which surpassed a predicted 0.3% jump, was the largest in months.
