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Montevideo, November 29th 2022 - 08:55 UTC

 

 

US job growth accelerated in January, but payrolls downgraded over a 12 month period

Saturday, February 8th 2020 - 11:04 UTC
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The strong start to 2020 is a boost to President Donald Trump who is seeking a second term in office in the Nov. 3 election The strong start to 2020 is a boost to President Donald Trump who is seeking a second term in office in the Nov. 3 election

U.S. job growth accelerated in January, with unseasonably mild temperatures boosting hiring in weather-sensitive sectors, indicating the economy will probably continue to grow moderately despite a deepening slump in business investment.

The Labor Department's closely watched monthly employment report on Friday, however, showed the economy created 514,000 fewer jobs between April 2018 and March 2019 than originally estimated.

The strong start to 2020 is a boost to President Donald Trump who is seeking a second term in office in the Nov. 3 election, but the biggest downgrade to payrolls over a 12-month period since 2009 showed the labor market was not as robust as the Republican president has boasted.

“Strong job creation in January provided reassurance that the record-long economic expansion still has room to run,” said Lydia Boussour, a senior U.S. economist at Oxford Economics in New York. “But this latest health report also points to a maturing labor market, with benchmark revisions showing it isn't as youthful as it has pretended to be over the last two years.”

Non-farm payrolls increased by 225,000 jobs last month, with employment at construction sites increasing by the most in a year amid milder-than-normal temperatures, the government's survey of establishments showed. There were also strong gains in hiring in the transportation and warehousing industry.

With the coronavirus hitting the Chinese economy hard, U.S. payrolls growth could slow in the coming months. The Federal Reserve on Friday flagged the coronavirus as a risk to the U.S. economy.

“Until it is clear that the hiring was due to an upward shift in the overall economic growth rate, we have to assume that there are weaker numbers coming sometime during the next few months,” said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania.

The economy grew 2.3% in 2019, the slowest performance in three years, after logging 2.9% growth in 2018. Growth this year is seen around 2%. The benchmark revisions left job gains in 2019 at 2.1 million, the fewest since 2011.

Trump, speaking ahead of a trip to North Carolina, described the job numbers as “fantastic” and added that “jobs continue to be great, our country continues to do great.”

U.S. House of Representatives Speaker Nancy Pelosi, a Democrat, said the sharp downgrade to payrolls in the 12 months through last March “shows the rot at the heart of the Trump economy.” She noted that “three years in, the Trump economy is creating 42,000 fewer jobs a month on average than the last three years of President Obama.”

The labor force participation rate, or the proportion of working-age Americans who have a job or are looking for one, rose two-tenths of a percentage point to 63.4per cent last month, the highest since June 2013. As a result, the jobless rate rose to 3.6per cent from 3.5per cent in December.

Economists said the higher participation rate, if sustained, suggests the economy needs to create about 130,000 jobs per month to keep up with growth in the working-age population, instead of the 100,000 estimated by Fed officials.

The construction industry added 44,000 jobs in January, the largest since January 2019, after payrolls increased by 11,000 in December. Employment in the transportation and warehousing industry accelerated by 28,000, driven by gains in the hiring of couriers and messengers.

Payrolls in the leisure and hospitality sector increased by 36,000 jobs. Healthcare and social assistance employment rose by 47,200 jobs. There were also gains in hiring in the professional and business services, and wholesale trade industries.

But manufacturing employment declined by 12,000 jobs after falling by 5,000 in December. The industry has been the hardest hit by the U.S.-China trade war. Though Washington and Beijing signed a Phase 1 trade deal last month, U.S. tariffs on US$360 billion of Chinese imports, about two-thirds of the total, remained in place.

Categories: Economy, Politics, United States.

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