WASHINGTON, Feb 6 (Reuters) - U.S. job
growth rose solidly in January and wages rebounded strongly, a show of
underlying strength in the economy that puts a mid-year interest rate increase
from the Federal Reserve back on the table.
Nonfarm
payrolls increased 257,000 last month, the Labor Department said on Friday.
Data for November and December was revised to show a whopping 147,000 more jobs
created than previously reported, bolstering views consumers will have enough
muscle to carry the economy through rough seas.
At 423,000,
November's payroll gains were the largest since May 2010, when employment was
boosted by government hiring for the population count.
While the
unemployment rate rose one-tenth of a percentage point to 5.7 percent, that was
because the labor force increased, a sign of confidence in the jobs market.
January marked
the 11th straight month of job gains above 200,000, the longest streak since
1994.
Economists
polled by Reuters had forecast hiring increasing 234,000 last month and the
unemployment rate holding steady at 5.6 percent.
The continued
improvement in the labor market comes despite the economy slowing. Sputtering
growth overseas and lower oil prices have weighed on exports and business
investment.
Wages increased
12 cents last month after falling five cents in December. That took the
year-on-year gain to 2.2 percent, the largest since August.
Interest rate
hike expectations had been dialed back to September in the wake of December's
surprise drop in wages.
The Fed last
week ramped up its assessment of the labor market. Brisk job gains and the
improvement in wages could harden expectations of a June policy tightening.
The pick-up in
wages is likely to combine with lower oil prices to provide a massive tailwind
for consumer spending and keep the economy growing at a fairly healthy clip,
despite the global turmoil.
Growth braked
to a 2.6 percent annual rate in the fourth quarter.
While several
states put in place higher minimum wages last month, that likely had a minimal
impact on wages. Economists say roughly three million workers may have been
affected, accounting for just 3 percent of the private sector's more than 118
million employees.
The government
revised payroll employment, hours and earnings figures dating back to 2010. The
level of employment in March 2014 was 91,000 higher than previously estimated.
A new
population estimate that will be used to adjust the figures from its household
survey was also introduced. That survey is used to determine the number of
unemployed and the size of the workforce.
Away from the
firmer wages and job growth, the labor force participation rate, or the share
of working-age Americans who are employed or at least looking for a job, rose
two-tenths of percentage point to 62.9 percent, a sign of confidence in the
jobs market.
A broad measure
of joblessness that includes people who want to work but have given up
searching and those working part-time because they cannot find full-time
employment rose to 11.3 percent from 11.2 percent in December.
In January,
private payrolls increased 267,000. November and December private employment
was revised higher. Private payroll gains in November were the largest since
September 1997.
Manufacturing
added 22,000 jobs in January. Construction payrolls increased 39,000 after
rising 44,000 in December.
Retail
employment increased 45,900 after braking sharply in December. The only areas
of weakness were government, where payrolls fell 10,000, and transportation employment
which dropped 8,600, the first drop since last February.
Temporary help
fell 4,100, the first drop in a year.
