Total non-farm payroll employment rose by 225,000 in January, and the unemployment rate was little changed at 3.6%, the U.S. Bureau of Labor Statistics reported today. The number eclipsed the 165,000 new jobs that were expected by economists.
Job gains occurred in construction, in health care, and in transportation and warehousing.
In January, construction employment rose by 44,000. Most of the gain occurred in specialty trade contractors, with increases in both the residential (+18,000) and nonresidential (+17,000) components. Construction added an average of 12,000 jobs per month in 2019.
In January, average hourly earnings for all employees on private non-farm payrolls rose by 7 cents to $28.44. Over the past 12 months, average hourly earnings have increased by 3.1%. Average hourly earnings of private-sector production and non-supervisory employees were $23.87 in January, little changed over the month (+3 cents).
Joel Kan, the Mortgage Bankers Association’s associate VP of economic and industry forecasting, reacted to the report: “The January jobs report was stronger than expected, with 225,000 jobs added and the unemployment rate at 3.6%. Last month’s increase in construction employment (44,000 jobs) was a positive development for housing, as the home building sector has been challenged by labor shortages and high costs. Wages grew at 2.9% on a year-over-year basis in December 2019, but firmed to 3.1% in January. Increasing wage growth is a welcome sign for households looking to buy a home this spring.”
Lawrence Yun, chief economist at the National Association of Realtors, in an alert from the group, wrote, “The unemployment rate remains at super-low levels across all ages, all ethnic groups, and every other grouping of workers. That’s due to the unrelenting 20 million net job additions for over a decade since 2010. The current year started off with similar strength with 225,000 net new jobs in January, which will translate – if the pace holds – into a grand 2.7 million annualized job creations in 2020. The construction jobs numbers are key for the real estate sector, as there is simply not enough housing for the growing economy. Fortunately, 44,000 new construction jobs were added in the latest month, which is one of the better monthly figures in the past decade. Even in commercial real estate, vacancy rates have tilted down, implying more construction is needed. Still, America is currently short by around 5 to 6 million housing units and much more construction is needed. Workers in construction are earning $31.19 per hour on average. Government at all levels needs to incentivize young people who are not interested in college to seek vocational training.”
