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Director of Demand Planning, $10B CPG Company

Employment Situation, January 2016

 

Employment Summary for
January 2016

The U.S. unemployment rate inched down as wages grew, though job gains were lower than expected.

Wages rise

The unemployment rate fell a tenth of a point to register at 4.9 percent in January. It was the first time the rate has slipped under 5 percent since 2007, according to the Wall Street Journal. Over the year, unemployment fell by 0.8 percentage point.

Wages had a strong start to the new year, with average hourly earnings for private nonfarm payrolls rising by 12 cents to $25.39. Average hourly earnings increased by 2.5 percent over the year.

Average hourly earnings for private sector production and nonsupervisory employees grew by 6 cents to reach $21.33.

Retail, food and beverage add jobs

Total nonfarm payroll employment grew by 151,000 in January, falling short of economists' predictions. However, the news source noted that the gains mark the 64th consecutive month of job creation in the U.S.

The greatest job gains were in retail trade. The sector added 58,000 jobs in January, generally unchanged from December, which economists noted was atypical given the swell of job growth during the holiday season. General merchandise stores created 15,000 positions and electronics and appliance stores added 9,000 jobs. Retail employment grew by 301,000 over the year.

Food services and drinking places added 47,000 jobs, and over the year added 384,000 jobs.

Healthcare continued its job growth trend and added 37,000 jobs during the month, driven by hospitals adding 24,000 jobs.

Manufacturing created 29,000 jobs after a relatively stagnant 2015. Most of the gains were in food manufacturing, which added 11,000 positions.

Financial activities also added 18,000 jobs, and professional and business services registered little growth.

Unusually large seasonal layoffs caused private educational services to lose 39,000 positions in January. Transportation and warehousing employment dropped by 20,000, and mining continued its downward trend, losing 7,000 jobs during the month.

Job gains were revised for the previous two months. November gains were increased from 252,000 to 280,000, while December gains were decreased from 292,000 to 262,000. The average monthly job gains over the previous three months was 231,000.

Rate hike predictions

The January report is causing economists to rethink their predictions for interest rate hikes in the coming year.

"We now expect two rate hikes this year in June and December, as opposed to three in our previous baseline," said Barclays economists in a report, according to the Wall Street Journal.




The full Bureau of Labor Statistics report can be downloaded here:

 

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