USA economy adds 304,000 jobs in January

USA economy adds 304,000 jobs in January

USA economy adds 304,000 jobs in January

USA employers shrugged off last month's partial shutdown of the government and engaged in a burst of hiring in January, adding 304,000 jobs, the most in almost a year.

While jobs were added, the USA unemployment rate rose from 3.9% to 4% in January. I also predict that earnings will post a 7-cent increase, for a 3.1 percent year-over-year gain.

Although the economy is said by many market analysts to be slowing down, the month of January marked 100 months in a row of positive job creation, the longest streak on record.

The unemployment rate, however, did tick up 0.1 percentage point to four percent, largely as a result of the longest government shutdown in USA history. Federal employees on furlough during the partial government shutdown were counted as employed in the establishment survey because they worked or received pay (or will receive pay) for the pay period that included the 12th of the month. This is the fastest rate of wage increases in almost a decade. Job gains occurred in several industries, including leisure and hospitality, construction, health care, and transportation and warehousing. Glassdoor saw a 10 percent bump in federal workers looking for jobs on its website two weeks after the government shutdown started - when they missed their first paychecks. The continued strong job growth in construction is perplexing given the sector's reported chronic labor shortage, but provides a good sign for the housing sector. Government shutdown or not, this looked like a big report from the Bureau of Labor Statistics for January's employment situation.

Despite forecasts of a further 170,000 jobs, the United States labour market gained 304,000 in January, according to non-farm payroll employment figures.

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The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) increased by about one-half million to 5.1 million in January. The Labor Department calculates the unemployment rate by using a different survey - known as the household survey - where they literally knock on the doors of some people's homes and ask how many adults are employed and how many are unemployed. Those factors have led many economists to forecast slower growth this year compared with 2018. The nonpartisan Congressional Budget Office estimates that it lowered annual growth for the January-March quarter by about 0.4 percentage point, to a rate of 2.1 percent.

For the full year of 2018, the average monthly jobs gain was 223,000. The wage number is long overdue, and the jobs number continues to outpace the underlying demography.

After an upward revision for nonfarm payroll employment in November and a downward revision in December, jobs gains averaged 241,000 over the past three months.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc.

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