Payrolls Up 111,000
Washington, DC, February 2, 2007--Nonfarm payrolls increased by 111,000 in January, the Labor Department reported. The jobless rate ticked up to 4.6% in January. This is the highest rate since September.
The increase in payrolls was below the 170,000 expected by economists surveyed by MarketWatch. The unemployment rate had been expected to hold steady at 4.5%.Payroll growth in the fourth quarter was stronger than expected. The government raised its estimate of job growth in the October-December quarter by a net 104,000 jobs. The report includes annual benchmark revisions.
Average hourly earnings increased by 3 cents, or 0.2% to $17.09 in January. Hourly earnings are up 4.0% in the past year. Hourly earnings in December were revised down slightly to a 0.4% gain, compared with the initial estimate of a 0.5% increase.
The details of the report suggested some softening in the labor market.
The Fed chose to hold its overnight interest-rate target at 5.25% at its meeting earlier this week. But the central bankers pointed to the tight labor market as the reason why they may have to hike rates again in coming months to combat inflation.
Although the economy slowed in the second and third quarter, the labor market remained tight. Fed officials described this as a puzzle. Today's report suggests that the weakness may just have been delayed.
The average workweek fell by six minutes to 33.8 hours in January from 33.9 hours. Total hours worked in the economy fell by 0.1%. Hours worked in the manufacturing sector fell by 12 minutes to 40.8 hours and factory overtime also declined.
In January, most of the job growth came from the service sector.
Service-producing industries added 104,000 jobs, including 31,000 in education and health services and 25,000 in professional and business services. Retail added 4,000 jobs.
Government added 14,000 jobs.
Goods-producing industries added 7,000 jobs. Construction spending added 22,000. Manufacturing firms lost 16,000 jobs.