The Incredible Expanding Job Market
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There’s no hint of recession in January’s employment report.
The U.S. labor market is proving to be remarkably resilient, which may be both good and bad news for the Federal Reserve. Employers added 517,000 jobs in January while the unemployment rate fell to a 53-year low of 3.4%, according to the Labor Department’s monthly report.
Recent jobs reports had signaled that hiring was slowing, especially in retail, manufacturing and warehousing as consumers spent less on goods. But the January report showed broad job growth, mostly in services, including leisure and hospitality (128,000), trade and transportation (63,000), healthcare (58,200), temporary services (25,900) and construction (25,000).
Information lost 5,000 jobs, which dovetails with layoffs in the tech industry. But most businesses continue to hire.
Wage growth seems to be slowing somewhat. Average hourly earnings increased by 0.3% last month and 4.4% over the past year. That means wages still aren’t keeping up with inflation, but they also aren’t evidence of a wage-price spiral.
In any case, the good news is that more young people are working. Employment increased last month by 871,000 among Americans ages 20 to 24 and 528,000 among those between the ages of 25 and 34 after the adjustment. Labor-force participation and employment during the pandemic recovery lagged among young people. Maybe more are now leaving Mom’s basement as savings from pandemic transfer payments run out.
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