WASHINGTON (McClatchy) — The labor market got off to strong start in 2018 as employers added a larger-than-expected 200,000 jobs to payrolls and wage gains accelerated in January to the fastest annual pace since the recovery began, the Labor Department said Friday.
The nation’s unemployment rate held steady at a 17-year low of 4.1 percent for the fourth straight month.
The sustained low unemployment and solid job growth show that the U.S. economy is performing well and that the tightening labor market may finally be starting to push up wages.
Average hourly earnings for all private-sector workers last month were up 2.9 percent from January 2017, the largest year-over-year percentage gain since June 2009, when the economy emerged from the Great Recession.
Policymakers at the Federal Reserve have been looking for wage pressures to build, and the latest jobs report could be a sign of rising inflation and higher interest rates to come. The central bank held its benchmark rate steady earlier this week, but Friday’s report is likely to increase the odds of a rate hike in March.
The hiring last month exceeded most analysts’ forecast for job growth of about 175,000 in January, which was right around the monthly average increase for last year.
January’s job gains were widespread, with construction, food services and healthcare industries leading the way. Manufacturing also continued a yearlong pattern of solid hiring, adding a net 15,000 new jobs last month.
Most analysts are expecting the pace of job growth to slow this year but to remain well above the 80,000-to-100,000 range needed to absorb new entrants to the labor market and keep the unemployment rate from rising.
Many experts expect the jobless rate to fall to below 4 percent this year, and that should benefit more groups of workers with historically high unemployment. In January, the jobless figure for blacks rose to 7.7 percent after falling to a record low of 6.8 percent in December, a level that prompted President Trump to frequently highlight the economic progress under his watch.
Jobless rates for groups can be volatile, and last month’s figures included annual population adjustments by the Labor Department that make for difficult comparisons with the prior month.