U.S. employers hired at a strong pace last month, wages rose by the most in six years and Americans responded by streaming into the job market to find work.
The Labor Department reports this morning that the economy gained a seasonally adjusted 257,000 jobs in January and added far more in previous months than originally estimated. Businesses added 414,000 jobs in November, the government now says, the most in 17 years. Total job gains in December were also revised higher, to 329,000, up from 252,000.
Average hourly wages, meanwhile, jumped 12 cents to $24.75, the biggest gain since September 2008. Hourly pay has increased 2.2% in the past year.
Despite the positive numbers, the unemployment rate ticked up to 5.7% in January from 5.6% the month previous. But that’s not necessarily a bad thing. More Americans began looking for jobs, though not all found work. Their job hunting suggests they are more confident about their prospects.
That is ahead of inflation, which rose just 0.7% in 2014. The sharp drop in gas prices in the past year has held down inflation and boosted Americans’ spending power. Still, wages typically increase at a 3.5% pace in a fully healthy economy.
Strong hiring pushes up wages as employers compete for fewer workers. Job gains have now averaged 336,000 a month for the past three months, the best three-month pace in 17 years. Just a year ago, the three-month average was only 197,000. The Associated Press has the full story.
