DHAKA: The U.S. economy added 257,000 jobs in January, adding to the gains from last year, which was the best for job growth since 1999. The official unemployment rate ticked up to 5.7%, a notch higher than December.
"The labor market recovery is finally hitting its stride," says Gus Faucher, senior economist at PNC Bank.
More people are now looking for work as they see others get employment. Faucher believes the higher unemployment rate "is good news that’s a sign of confidence in the job market."
The optimism doesn't stop there. There were huge upward revisions to the job gains in November and December. The economy added about an extra 150,000 job in those two months combined, according to the Labor Department, another sign of the positive momentum.
One of the biggest worries is that the dramatic fall in oil prices in recent months will cost many American workers their jobs in the energy sector. Texas, the second-largest state economy, could be hard hit. A number of big oil companies have already announced thousands of layoffs.
The economy still added almost 200,000 oil and gas jobs in January, but that is down slightly from December's energy job gains.
The strong dollar and oil prices are raising red flags, but wages could take center stage in the debate about the economy's health this year, economists say.
January’s job news was a reprieve from the economy's rocky start to 2015. There is growing concern that the dollar's pressure could hurt sales abroad so much it could eventually cause layoffs in U.S. this year.
Some of America's largest employers, like Microsoft and Procter & Gamble, signaled that the dollar may hurt their business this year. Unfortunately, the dollar is not the only concern for the job market.
Perhaps the best news for many Americans is that wages grew a healthy 2.2% in January compared to a year ago. Last year wages barely rose. President Obama touted wage growth in his State of the Union address, but wages have not changed much for many Americans.
Some of the wage gains could have come from several states increasing their minimum wages at the start of the year. Over 3 million workers got a raise from the wage hikes.
The Federal Reserve wants to see consistent wage growth before it raises its key interest rate -- a sign that the U.S. economy is healthy. It aims to see wage growth above at least 2%. In December, wages only grew 1.7% on the year.
"Wages haven't grown in way a lot of people hope that they would," says Bridget Weishaar, an equity analyst at Morningstar research.
BDST: 2204 HRS, FEB 06, 2015
