The January jobs report is starting the year off right with an increase in hourly wages and unemployment at an 8 year low. As President Obama said, "Americans are working."
This is great news for the economy, but it means that employers might find it more difficult to recruit the best of the best. Job seekers can afford to be more selective, and many of them will already have jobs. Those employed workers may start passively looking for other opportunities, so recruiters might need to alter their recruitment strategy.
The Department of Labor's report wasn't all good news, but it's definitely another step in the right direction. If things continue on this track, it's unlikely that the economy will fall into recession despite the slowdown in China, tanking oil prices, risks in the emerging markets, and turmoil in the markets.
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Increase in Average Hourly Earnings
The best news in the January report for the economy was the half percentage point increase in average hourly earnings. This means overall wages have risen 2.5% in the last twelve months. Some of this is because employers have had to offer more to get the best talent, but it's also partly due to an increase in the minimum wage. Over a dozen states increased the minimum wage in 2016, and there more have plans to do so in the coming years.
10 percent of the American workforce was unemployed in 2009. The jobs report puts unemployment at 4.9 percent in January 2016, an eight-year low. This employment rate is one of the signals that the U.S. is nearing full employment.
Employers created 151,000 jobs last month, which is very strong, even though it's a decrease from December's whopping 262,000 new jobs. The manufacturing industry reversed its weakness in the second half of 2015, adding 29,000 jobs in January. The construction industry didn't do so badly itself, with 18,000 new jobs in January despite the winter weather. Retail added 58,000 jobs, which could suggest that the increase in December was not due to seasonal hiring.
Some Weakness in Commodities Jobs
Industries related to the commodities markets did not do so well, due to falling prices in the sector. Over 2,000 oil and gas drillers lost their jobs in January, with seasonal adjustments, and the overall mining industry has laid off 146,000 workers since September of 2014.
Who is Getting Hired
The January jobs report follows the trend that's been going since the beginning of the recovery in mid-2009: educated workers are getting hired. College graduates maintained their unemployment rate of 2.5 percent, but that number rose to 7.4 percent for workers who didn't graduate high school.
January Jobs Report Shows Good Things to Come
While the most recent jobs report didn't wow analysts like the December report, it's still a good signal that the US is continuing on the road to recovery. While the decrease from December could signal that the economy is slowing, the fact that the U.S. is nearing full employment is undeniably good news.