In this morning’s data, the economy added 353,000 jobs in January, much higher than expected and includes a strong revision higher to the previous month. The Health Care and Social Assistance industry was again relatively strong while the Mining and Logging industry was relatively weak. The Unemployment Rate held steady at 3.7% and the Labor Force Participation Rate at 62.5% is the same as the previous month. Average Hourly Earnings increased 0.6% in January, double what was expected, and grew 4.5% on an annual basis. In addition, Average Weekly Hours were 34.1, which is three-tenths lower than the previous month.
Overall, there was yet another strong increase in the headline jobs number in January, coupled with a low unemployment rate. The labor market remains resilient. In addition, wages increased more than expected in January and grew 4.5% on an annual basis, above the long-term average. As long as people can work, they tend to spend money and keep the economy moving. Earlier this week, the Federal Reserve decided to keep rates steady and indicated rates may stay at current levels through their March meeting. How and when the Federal Reserve becomes more predictive in its policy, possibly considering rate decreases based on their view of future economic conditions, will be a key factor for the markets in the weeks ahead.
Following the release of the jobs report, the yield on the U.S. 10-year treasury moves higher and equity futures are mixed as we head into the market open.
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