Announced this morning, the economy added 143,000 jobs in January, less than expected with an upward revision to the previous month. The Retail Trade industry was relatively strong, while the Leisure and Hospitality industry and the Professional and Business Services industry were both relatively weak. The Unemployment Rate fell one tenth to 4.0% and the Labor Force Participation Rate at 62.6% is one tenth higher than the previous month. Average Hourly Earnings increased 0.5% in January, more than expected, and grew 4.1% on an annual basis. In addition, Average Weekly Hours were 34.1, which is one tenth less than the revised figure from previous month.
Overall, another month where the economy added jobs, albeit less than expected and less than the previous month. Meanwhile, the unemployment rate fell one tenth to 4.0%, remaining low, and the participation rate rose slightly, which is the first time in a few months. Wage growth was higher than expected and is now above historical averages on an annual basis. With higher wages supporting consumers’ ability to spend, it bodes well for the economy.
The labor market remains resilient, supporting a decent economic backdrop. Meanwhile, earnings reports have been mostly positive so far this earnings season. Coupling these data points with inflation measures that are above the Federal Reserve’s targets, the Fed is likely to remain cautious on any adjustments to monetary policy in the coming weeks.
Following the release of the jobs report, the yield on the U.S. 10-year treasury ticks higher and equity futures are mixed as we head into the market open.
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