Wages are up as US adds 200,00 jobs in January

WASHINGTON — U.S. employers added a robust 200,000 jobs in January, and wages rose at the fastest pace in more than eight years, encouraging trends that suggest that the economy may accelerate this year.

The unemployment rate remained 4.1 percent, the lowest level since 2000, the Labor Department said in its monthly jobs report Friday.

The pay gains show that employers are increasingly competing for a narrower pool of workers with the U.S. expansion now in its ninth year. Raises stemming from Republican tax cuts and minimum wage increases in 18 states also likely boosted pay last month. The figures point to an economy on strong footing, fueled by consumer spending and global growth.

“Labor is becoming scarce, and employers have to work to find, retain and train employees,” Diane Swonk, chief economist at Grant Thornton, said. “This is new for many employers.”

The pickup in wages could make it likelier that the Federal Reserve will raise short-term interest rates more quickly in coming months. In anticipation of inflation pressures and of a possible acceleration of Fed rate hikes, investors sent the yield on the benchmark 10-year Treasury note surging after the jobs report was released. The yield reached 2.84 percent, from 2.79 percent before the jobs report was released.

Stock prices also plunged after the jobs report was issued, partly in response to the prospect of higher rates as well as to poor earnings reports from Google’s parent company Alphabet, Exxon Mobil and Chevron.