The U.S. job market is canon to the front in January, as employers added more jobs than expected and wage growth was the strongest in over eight years.
US payrolls expanded by 200 000 last month, led by hiring in the construction, food services and health care, the united states Department of Labor said.
The average hourly wage for workers in the private sector crept up by 2.9% compared to January 2017.
The unemployment rate remained stable at 4.1%.
Economists have puzzled over lacklustre wage growth, which has been lagging behind in the previous months, despite the drop in the unemployment rate.
Without increasing wages, economists have warned that economic growth will be difficult to sustain, since consumer spending plays an important role in the u.s. economy.
The Labor Department report, released Friday, showed that the average hourly earnings of private-sector workers rose 9 cents in January, to $26.74. For the year, there was an increase of 75 cents.
The wage increase has coincided with the mandatory minimum, wage increases in 18 states. Large employers such as Walmart have also stated that they planned to increase revenue, or provide bonuses.
These factors may have contributed to rise the figures of last month, but it is more difficult to say if the increase will continue, said Lindsey Piezga, chief economist for fixed income at Stifel, based in Chicago.
“While this is encouraging, what we really need to see is sustained, the growth of wages, not one-off, month-to-month volatility,” she said.
Other data in the report points out that the monthly gains may be short-lived.
For example, the unemployment rate among black workers rose in January to 7.7%, on the rise after falling to a record low of 6.8% in December.
The president, Donald Trump had trumpeted the decline as evidence of economic improvement.The slowdown in momentum?
The united states is now in its ninth year of expansion, and has been adding jobs consistently since 2010.
The increases in January occurred in most industries, a sign of good growth.
The pace of hiring is slowing, however.
Over the last three months, wages have grown by an average of 192,000 jobs, compared to over 200,000 for the same period of the previous fiscal year.
“I don’t think we should be too excited about it,” said Ms. Piezga.
“The dynamism of the american economy is in decline. We’re still talking about positive growth, positive job creation, but at a slower pace.”
Economists said a slowdown in job creation is to be expected as new workers increasingly difficult to find.
Despite a relatively high number of job opportunities, participation in the labour market remained stuck below 63%, several percentage points lower than it was before the financial crisis.
US stock index slipped after the report.
Analysts have said part of the decline was due to the reaction of investors to the wage increase, which is likely to keep the Federal Reserve on track to raise interest rates and could make decision-makers move more aggressively.
The Fed is one of a number of central banks who turn from the policies that have been designed to stimulate economic activity, in the wake of the financial crisis.