US economy added 200,000 jobs in January

Economists waiting to see if low unemployment will produce higher wages

The economy added 200,000 jobs in January as the unemployment rate stayed at 4.1 per cent, federal economists reported yesterday.

Analysts had predicted the economy had added 180,000 jobs last month.

The unemployment rate has hovered at the lowest levels since the final months of Bill Clinton’s presidency in 2000. It has been slowly declining since a peak of 10 per cent in 2009.

Now economists are waiting to see if low unemployment will produce increased wages, as employers are more eager to retain and attract workers now that the pool of available labour is far smaller.

“The labour market is really tightening,” said Catherine Barrera, chief economist at ZipRecruiter, a jobs site. “You do see wages rising, though more quickly in certain geographic areas.”

In December, employers added only 148,000 jobs, according to the federal Bureau of Labor Statistics, which compiles the monthly jobs report.

The analysts caution against drawing overly broad conclusions from a single report, saying the long-term averages provide a better gauge of the country’s economic vitality.

Politicians, however, often cite the figure to defend their stewardship of the economy or criticise their rivals.

Trump cites job growth

President Trump has frequently cited job growth during his administration as proof he’s delivering the economic renaissance he promised during his campaign. So far, however, job growth under Trump has been similar to the growth under President Barack Obama. US employers added 2.1 million jobs in 2017, compared with 2.2 million in 2016.

Trump has also touted declining unemployment among some minority groups.

“African American unemployment stands at the lowest rate ever recorded, and Hispanic American unemployment has also reached the lowest levels in history,” Trump said in his State of the Union address on Tuesday.

The unemployment rate for black Americans in December was 6.8 per cent, down from 15.5 per cent in 2010, just after the last recession. For Hispanics and Latinos, the figure was 4.9 per cent, down from 12.9 over the same period.

Michelle Holder, an assistant economics professor at John Jay College of Criminal Justice at City University of New York who follows these trends, noted black unemployment has fallen each year for the last eight. (Hispanic and Latino unemployment has done the same.)

“The declining trend in unemployment overall and among African Americans is something President Trump inherited,” she said. “When he came into office, it was already on the decline.”

Holder said it’s too early to attribute these trends to Trumpera policies, adding that lawmakers should look beyond the statistics and more closely examine US working conditions.

Other factors beyond federal policy influence job growth, including the business cycle, consumer confidence and international economic conditions. Many economists are looking at the role of automation in the changing workforce.