Geeska Afrika Online

U.S. Unemployment Rate Unexpectedly Rises, Despite Strong Job Creation

The U.S. employment report for January released on Friday painted a mixed picture of the labor market as job creation smashed expectations, but the jobless rate ticked up unexpectedly and wage inflation saw weakness.

Nonfarm payrolls (NFP) rose by 304,000 in January, compared to the consensus estimate for the creation of 165,000 jobs, and the 213,000 new positions that the ADP report indicated on Wednesday.

December’s reading of NFP was revised down from an initial 312,000 reading to a gain of 222,000.

The jobless rate unexpectedly rose to 4.0%. Analysts had expected it to remain unchanged at 3.9%.

Average hourly earnings advanced 0.1% month-on-month in January, below the consensus estimate of 0.3% and a slowdown from December’s increase of 0.4%.

On an annualized basis, wage inflation grew 3.2% in January, in line with expectations. Average hourly earnings had gained 3.3% the previous month in what was an upward revision from an initial 3.2% rise.

The increase in wages is being closely monitored by the Federal Reserve for evidence of diminishing slack in the labor market and upward pressure on inflation. Economists generally consider an increase of 3.0% or more to be consistent with rising inflation.

Average weekly hours held steady as expected at 34.5 last month.

Government payrolls increased by 8,000 last month, compared to the prior creation of 16,000 public positions.

December’s data on government payrolls was an upward revision from the initial gain of 11,000 public positions.

The participation rate rose to 63.2% last month, from December’s reading of 63.1%.

The U-6 unemployment rate, that includes those workers who are working part-time for purely economic reasons, increased to 8.1% in January from the prior 7.6%.



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