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Politics & MoneyMortgage

U.S. economy adds 304,000 jobs in January

Wages for private non-farm payrolls rise to $27.56

The unemployment rate rose to 4% in January, according to the latest Employment Situation Summary report from the U.S. Bureau of Labor Statistics.

According to the report, the number of unemployed persons increased to 6.5 million in January.

Realtor.com Chief Economist Danielle Hale said with the Federal Reserve pledging patience, there is almost no downside to a strong jobs report which is good news because today’s data was incredibly strong.

The jobless rates for all other groups, including men at 3.7%, women at 3.6%, teenagers at 12.9%, whites at 3.5%, blacks at 6.8%, Asians at 3.1% and Hispanics at 4.9% — these all showed little or no change over the month.

Total non-farm payroll employment increased by 304,000 in January, compared to a monthly gain of 223,000 in 2018.

It is worth noting that the change in total non-farm payroll employment in November was revised to 196,000 jobs, up from 176,000. Furthermore, the change for December was revised down from 312,000 to 222,000.

“Although December's huge gain was revised slightly lower, we’re continuing to see a healthy labor market that will help support continued economic growth,” Hale continued. “304,000 jobs were added and the unemployment rate ticked up to 4%, in part due to the effects of the government shutdown, which is now at least temporarily over."

With these revisions, employment gains in October and November combined were 70,000 less than previously reported.

However, the number of long-term unemployed persons held steady at 1.3 million in January, which accounted for 19.3% of the unemployed.

The average hourly earnings for all employees on private non-farm payrolls inched forward three cents to $27.56. Over the year, average hourly earnings rose by 3.2%.

“One of the most positive indicators in today's report is continued wage growth, with hourly earnings up 3.2% year over year in January,” Hale said. “With rising wages and slowing home price growth, dreamers may be better positioned to make homeownership a reality as we enter the spring buying season.”

The majority of job gains in January can be attributed to an increase in jobs in healthcare, hospitality and leisure, construction, and transportation and warehousing.

Here are some of the areas that showed notable changes in January:

  • Employment in healthcare increased 42,000
  • Employment in hospitality and leisure increased 74,000
  • Employment in construction increased 52,000
  • Employment in transportation and warehousing increased 27,000

The average workweek for all employees on private non-farm payrolls  remained unchanged at 34.5 hours in January.

Mortgage Bankers Association Chief Economist Mike Fratantoni said today’s report on January employment conditions shows that the job market remains exceptionally strong.

“Although the partial government shutdown may have temporarily increased the unemployment rate, this pace of job creation will continue to support higher wages, which will in turn support strong housing demand,” Fratantoni continued. “With the Fed just this week highlighting that they would remain “patient” with respect to any future interest rate increases, mortgage rates are likely to remain stable. Stable rates and growing wages are a good combination for potential homebuyers.”

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