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After several sub-par months of job growth, U.S. employers added 227,000 nonfarm payroll jobs in January, according to the U.S. Department of Labor, Bureau of Labor Statistics Employment Situation report issued Feb. 3. That marked the 76th consecutive month of job growth. 

employed vs nonfarm payroll

The unemployment rate edged up slightly for the month, from 4.7% to 4.8% as more people entered the workforce in search of employment.

unemployment

The 227,000 new jobs exceeded the 2016 monthly average of about 180,000 jobs, and nearly equaled the 2015 average of 229,000 jobs. We believe the recent trend of declining job growth is the natural result of the drop in the unemployment rate over the past few years.

At 4.8%, the current unemployment rate is right at the rate the Federal Reserve board has said it considers full employment.

The average hourly earnings for all employees on private nonfarm payrolls moved up by 3 cents to $26 after rising 6 cents in December. It has risen 2.5% over the past year.

average hourly earnings percent change

Here are some of the other key trends highlighted in the report: 

  • The number of unemployed persons looking for jobs edged up slightly from 7.5 million to 7.6 million for the month.
  • The civilian labor force increased by 584,000 in January, and the labor force participation rate rose by 0.2% to 62.9%. Total employment, as measured by the household survey, was up by 457,000 over the month, and the employment-population ratio edged up to 59.9%.
  • The number of long-term unemployed (those jobless for 27 weeks or more) was nearly unchanged, moving from 1.8 million to 1.9 million in January, but remains at an elevated level. That accounts for 24.4% of the unemployed, which was up slightly from 24.2% the previous month.
long term unemployed 27 weeks or more
  • The labor force participation rate for those in their prime working years (age 25-54) remained unchanged at 81.5%, which is about 1.5% below the pre-recession level.
labor force participation rate
  • The average workweek was unchanged at 34.4 hours, which is in a range comparable to that preceding the last recession.
total private average weekly hours of all employees
  • The number of persons employed part time for economic reasons (also referred to as involuntary part-time workers) remains high, and moved up slightly from 5.6 million to 5.8 million in January.
part-time for economic reasons
  • Initial jobless claims, reported weekly, remained at a very low level.
initial unemployment claims

Strong job growth had been a contributing factor in the Federal Reserve Board’s decision to raise rates in December, although they declined to raise rates again in January. However, we believe that if employment figures remain strong, that will encourage further rate hikes during 2017. We believe that a series of small rate hikes during the year would be beneficial to net savers without materially affecting the economy or consumer spending.

Media contact:  Callie Briese, 612-844-7340; callie.briese@thrivent.com

 

 


All information and representations herein are as of February 3, 2017, unless otherwise noted.

The views expressed are as of the date given, may change as market or other conditions change, and may differ from views expressed by other Thrivent Asset Management associates. Actual investment decisions made by Thrivent Asset Management will not necessarily reflect the views expressed. This information should not be considered investment advice or recommendations of any particular security, strategy or product.

Asset management services are provided by Thrivent Asset Management, LLC, a wholly owned subsidiary of Thrivent Financial, the marketing name for Thrivent Financial for Lutherans.

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