Economists try to stay positive about Jan. jobs report
The newest jobs report from the Bureau of Labor Statistics (BLS) released last week was received with cautious optimism by some economists.
Volatility in financial markets since the start of the year made many in the business and financial worlds anxious about the release of the newest report. The hope was that positive numbers would help build confidence.
While some of the numbers were positive, many economists agreed that growth has slowed.
According to the report, the unemployment rate continues to reach new lows since the Great Recession. Dropping to 4.9 percent, the January rate is the lowest unemployment has been since Feb. 2008. This is a 0.1 percent drop from December’s rate.
Job growth was also positive but not near where economists hoped it would be. Total nonfarm employment rose to 151,000. The retail, food and healthcare industries led job growth while private education, transportation, and mining lost jobs last month.
The report also noted that average hourly earnings rose 12 cents last months. This is 2.5 percent increase from a year ago.
In a blog post, Chief Economist Scott Anderson of The Bank of The West said most experts were hoping to see jobs growth closer to 190,000. He did however say that big job gains in certain sectors like retail should be seen as a positive.
“...and leisure and hospitality (44K) sectors continued to add new employees as consumers benefit from rising incomes and lower oil prices. As long as consumer spending holds up, a chance of a U.S. recession this year remains a relative long-shot.”
Andrew Chamberlain, chief economist for Glassdoor, a jobs and recruiting website, was also cautiously optimistic in a blog post. He said unemployment and job growth last month still emphasises that the labor market remains strong regardless of its slowing trend.
“From a longer-term perspective, despite some signs of slowing the U.S. labor market remains the strongest in a generation, with near-record levels of job openings, a labor force at what most economists consider “full employment,” and clear signs of steady—albeit very slow—acceleration of wage growth.”
As expected, The White House was very optimistic about report. President Barack Obama held a press conference after it was released. He said January’s new jobs lead to 71 months of continued job growth in the private sector. He called this the longest streak on record.
“So as I said in my State of the Union address, the United States right now has the strongest most durable economy in the world,” said Obama. “I know that’s inconvenient for republican stump speeches as their doom and despair tour continues in New Hampshire. You can’t please everybody.”
However, Obama also acknowledged the turbulence in global markets and said work is still yet to be done.
Secretary of Labor, Thomas Perez echoed the President’s sentiment in a statement and added the slow and steady progress is paying off in wage growth as well.
“We also see solid wage growth, with average hourly earnings for all private-sector employees increasing by 12 cents,” he said. “January’s report indicates that the last six months have seen the fastest wage growth for all private-sector employees since the recovery began.”