Unemployment is down to a 17-year low of 4.1 percent as the U.S. economy added 200,000 jobs in January, smashing forecasts that expected a significantly smaller net jobs increase, Business Insider is reporting.
200,000 Net New Jobs Added
The economy added a net 200,000 non-farm jobs in January. That is, the number of jobs added was 200,000 greater than the number of jobs lost.
The number of jobs shattered Bloomberg‘s estimate that the economy would add 180,000 jobs in January.
Mining and manufacturing – two industries that Donald Trump promised to revitalize – saw increases in hiring, as did a broad range of other industries.
The addition of these new jobs brings the U.S. unemployment rate down to 4.1 percent, the lowest it’s been in 17 years.
Wages Increased As Well
Meanwhile, wages rose in January, as well, to the tune of a 2.9 percent increase in Americans’ hourly earnings – also a post-recession record. Again, this was a larger increase than analysts expected, even though the survey period concluded before January 15, a payday for many Americans.
Mark Hamrick, the senior economic analyst at Bankrate.com, suggests that wages may soon break a barrier that’s considered an important benchmark for economic policy.
“Could we see wage growth break through the 3 percent barrier? That’s a key question for the coming months.”
What Does This Mean For The Economy Moving Forward?
Hamrick is concerned that the economy may be growing at too fast a pace for government regulators to keep up.
“The markets will have to consider whether the economy is overheating — something we haven’t had to think about since the financial crisis and recession.”
It’s something Wall Street is going to have to grapple with as well. A surging economy means that the Federal Reserve will have to address the issue of interest rates and will likely raise them to keep the economy from overheating. Luke Bartholomew, an investment strategist at Aberdeen Standard Investments, says that investors should expect higher interest rates soon.
“It definitely makes it a bit more likely that the Fed will have to do more than the three hikes that they’re currently planning for this year.”
The Numbers Aren’t All Good
Despite the rosy picture presented by the new jobs report, there are still some areas where things don’t look great. Black unemployment, for example, spiked from 6.8 percent in December to 7.7 percent in January.
Further, some industries saw a net decrease in jobs, according to U.S. News & World Report. Those include the information sector (broadcasters, telecommunications professionals, and publishers), which lost 6,000 jobs, and utilities, which lost 1,000 jobs.