Today is jobs day in the US with the release of the January report. Given the steep rise in interest rates of late coupled with the Fed already underway in reducing the size of their balance sheet I think this report carries a little more weight than usual. Here are the headline numbers:
– US economy added 200,000 new jobs
– Unemployment rate remains at 4.1%
– Average hourly earnings rose 0.3% over the prior month
– Labour force participation rate remains at 62.7%
Overall good numbers coming in slightly better than expectations. I think it’s a good bet this will pave the way for a few more rate hikes in the coming months.
Net job growth:
200,000 is slightly above the 6 year average since 2011, and this is by far the longest job growth streak in history. The previous record was 48 straight months but this current streak has been going since 2010.
In this economy 4.1% unemployment rate is essentially full employment. Hard to imagine it getting much lower than this. We may get a few more ticks down but basically this is perhaps as healthy as the job market will get.
Labour Force Participation Rate:
A broadly debated issue is the steadily sliding labour force participation rate. Is it an issue with the current job market, or just the result of technological advances and an aging labour force?
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