BLS report shows hiring environment steadier still in January

02.05.2013


BLS reports shows hiring environment steadier still in January
BLS reports shows hiring environment steadier still in January

January saw a modest jump in new jobs, while employment gains in November and December were revised upward, suggesting both the hiring climate and the economy as a whole are steadily improving.

According to the most recent Bureau of Labor Statistics employment report, companies added 157,000 jobs last month, and the combined number of jobs added in the previous two months rose by 127,000. Still, the unemployment rate ticked up slightly, rising from 7.8 percent to 7.9 percent. The largest employment increases were noted in the retail trade, construction, healthcare and wholesale trade sectors.

According to Reuters, the data confirms that although the economic recovery has been a slow one, the U.S. is still on course for a better year in 2013 despite an output contraction in the final quarter of 2012 that befuddled analysts. 

The report, which is eyed as a major indicator of the health of the economy, also showed that hourly earnings increased, and the once-suffering construction and retail sectors appeared to come back to life. The strong hiring report will likely assuage any fears of slipping back into recession, which were spurred by Wednesday's report that showed the country's gross domestic product fell for the first time in three years. 

The results of the BLS report are on par with what analysts expected, who called for the economy to generate about 160,000 jobs, and for the unemployment rate to hang at 7.8 percent. 

The Associated Press reports that the BLS also painted a rosier picture of the hiring environment of the last two years. The updates show that employers brought on about 180,000 people each month in 2012 and 2011, compared with previous data that suggested growth was only about 150,000 new jobs per month. 

"The significantly stronger payroll gains tell us the economy has a lot more momentum than what we had thought," Joseph LaVorgna, chief U.S. economist at Deutsche Bank, said in a research note.

The report also indicated consumer spending will likely continue to rise in the coming months, as indicated by the major hiring that took place in the retail, construction and hospitality sectors.

"The strong and steady job gains from retail trade and construction look a lot more like a normal economic expansion," said Scott Anderson, chief economist at Bank of the West. "This is a sign that consumer spending is playing a far more important role in this expansion than it has so far."

Construction hiring, including new engineering jobs, was especially robust in January, adding 28,000 jobs last month. This came after 30,000 new jobs were added in December. According to Architect Magazine, the official numbers for construction employment nearly doubled what was expected by ADP and Moody's Analytics, marking the first time in four months that official data on the health of construction hiring has been better than private-sector reports. 

The bulk of the new jobs were for trade contractors in both residential and nonresidential construction, which accounted for 26,000 new jobs. About 700 jobs were added in the residential building construction sector. 

According to the news source, the monthly report adds to the construction industry's hot streak. After bottoming out in January 2011, the industry has added 296,000 new jobs. What's more, one-third of these new positions were added in only the last four months. 

The professional and business services sector, which includes temporary staffing agencies, remained stable in January. 

With average hourly earnings rising four cents last month, many experts see this as the beginning of a period in which wages and salaries will grow. 

"It may be that we are now getting to a point in the labor market where we are going to see an upward creep in average hourly earnings," said John Ryding, chief economist at RDQ Economics in New York.