U.S. Job Growth Misses Estimates In January But Unemployment Rate Drops
February 05 2016 - 4:20AM
RTTF2
Employment in the U.S. rose by less than expected in the month
of January, according to a report released by the Labor Department
on Friday, although the unemployment rate still edged lower.
The Labor Department said non-farm payroll employment climbed by
151,000 jobs in January compared to economist estimates for an
increase of about 188,000 jobs.
While the report also said the jump in employment in December
was downwardly revised to 262,000 jobs from 292,000 jobs, the
increase in employment in November was upwardly revised to 280,000
jobs from 252,000 jobs.
With the combined revisions, job growth in November and December
was only 2,000 jobs lower than previously reported.
The Labor Department said the increase in employment in January
was led by retail trade, food services and drinking places, health
care, and manufacturing.
However, the report also pointed to declines in employment in
private educational services, transportation and warehousing, and
mining.
Even though the job growth came in below estimate, the
unemployment rate still edged down to 4.9 percent in January from
5.0 percent in December. Economists had expected the rate to come
in unchanged.
The unexpected decrease pulled the unemployment rate down to its
lowest level since a matching rate in February of 2008.
The drop by the unemployment rate came as household employment
jumped by 615,000 people, while the labor force increased by
502,000 people.
The report also said average hourly employee earnings climbed by
$0.12 or 0.5 percent to $25.39 in January. Compared to the same
month a year ago, hourly earnings were up by 2.5 percent.
"It is difficult to see exactly what the Fed will make of this,"
said Rob Carnell, Chief International Economist at ING Commercial
Banking. "But with global financial conditions tightening, this
release says 'more data needed' before drawing any firm conclusions
about any shift in Fed policy."
"That does at least suggest that a March hike remains off the
table," he added. "And hopefully by then, we will have a better
idea of whether things are really slowing, with no further hikes
possible, or whether recent data were just a soft patch and the Fed
can resume tightening later in the year."
The Federal Reserve is scheduled to hold its next two-day
monetary policy on March 15th and 16th.
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