Job growth surged in January as construction firms and retailers ramped up hiring. But wage growth decelerated. Fred Katayama reports.
Smaller raises, but huge jobs gains. The U.S. economy added 227,000 jobs in January as construction companies and retailers stepped up hiring. That was the largest gain in four months, and it was a lot more than economists had expected. But the gains for the previous two months were revised lower. The unemployment rate ticked up to 4.8 percent but for a good reason: more people went looking for jobs. One surprise: wages grew just modestly ... up 2.5 percent year-on-year. It had been expected to rise more given that the minimum wage took effect in more than a dozen states last month. If wages keep growing sluggishly, the Federal Reserve may wind up raising interest rates at a gradual pace. RBC Capital chief equity strategist Jonathan Golub called it a "good report," saying, "The report told us you've got a strong labor market, and wage pressure isn't as bad as we thought it could be. If we keep having this type of employment data, you're going to see wages under pressure. That's the big story we'll be looking for in coming months." Another surprise: the retail sector added nearly 46,000 jobs, the biggest increase in almost a year. Payrolls at stores had been expected to fall because workers hired during the holiday season are normally laid off and many retailers announced store closures. Job gains were broadly based. Only utilities, transportation and government shed workers.