US job growth surges in January, with 225,000 added

FOX Business’ Edward Lawrence breaks down the January jobs report.

U.S. hiring topped expectations in January, as the economy added 225,000 jobs, kicking off the decade on a stronger-than-expected note.

It marks the 112th month of straight gains.

Unemployment ticked up slightly to 3.6 percent, as more people were looking for work, the Labor Department said Friday. The labor force participation rate edged up slightly to 63.4 percent. Average hourly earnings, meanwhile, rose by 7 cents over the past year to $28.44.

"Taken together, the first report of 2020 is a healthy one — showing that a possible redux of the roaring twenties updated for the 21st Century isn't off the table yet," Daniel Zhao, Glassdoor senior economist, said.

Powered by an unseasonably warm winter, the first payroll number 2020 surged past the estimate of 160,000 from economists surveyed by Refinitiv, who also saw the unemployment rate holding steady from December's 3.5 percent, a half-century low.

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Weather-sensitive industries led the way in job creation: Construction accounted for 44,000 positions, well above its 2019 average of 12,000. Leisure and hospitality also padded the number, adding 36,000 jobs.

Professional and business services increased by 21,000, while transportation and warehousing grew by 28,000.

Former Wall Street Journal editorial board member Stephen Moore argues that the uptick in January unemployment is a good thing as it was caused by an increase in the labor force participation rate.

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“The labor market is continuing at a solid pace, and unemployment remains low," said CareerBuilder CEO Irina Novoselsky. "It’s a crowded market for those battling to attract top talent and businesses are seeing the most traction when touting company culture along with their open positions."

As the U.S. continues the longest economic expansion on record, investors are looking at the Department of Labor’s monthly payroll and unemployment data for signs that the rapid job growth over the past two years is softening and leading way to an overall growth slowdown.

The report contained a bad omen for manufacturing, which has been in a year-long rut: In January, the sector lost 12,000 jobs, most of which stemmed from motor vehicles and parts.

PRIVATE SECTOR JOB GROWTH BLOWS PAST WALL STREET'S EXPECTATIONS IN JANUARY WITH 291,000 ADDED

There was another negative side, as well: Annual long-term revisions published by the Labor Department showed that employers added 514,000 fewer jobs than first estimated as of March 2019, up slightly from the initial 500,000 that economists projected in August. It was the biggest revision in almost a decade.

The Bureau of Labor Statistics publishes monthly employment statistics, but once a year, checks and revises the estimates those numbers are based on, known as the “benchmark revision.” The number, which is considered more precise, is based on data from state unemployment tax records.

Revisions to December and November brought the two months' combined totals up by 7,000. The initial estimate for November was adjusted up to 256,000, while December's rose to 147,000.

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