US jobs report: record-breaking streak continues as 225,000 added in January

Pace of hiring beat economic forecasts as unemployment rate remained at a 50-year low of 3.6%

US employers added another 225,000 in January as the record-breaking streak of job creation in the American economy entered its 11th year.

The pace of hiring easily beat economic forecasts that the US would add about 164,000 jobs over the month. As companies hired new workers in construction, healthcare and leisure and hospitality the unemployment rate remained at a 50-year low of 3.6%, according to the monthly survey by the Bureau of Labor Statistics.

Donald Trump has made the strength of the jobs market a central plank of his re-election campaign. Trumpeting the growth at his State of the Union speech this week he said: “If we had not reversed the failed economic policies of the previous administration, the world would not now be witness to America’s great economic success.”

But while the US continues to add jobs each month, issues remain. Despite record lows in unemployment and strong monthly gains, wage growth is sluggish, rising at an annual rate of just 3.1% in January. The annual growth rate is down to an 18-month low of 2.9%. The disconnect appears to be pinned to the types of jobs being created.

According to the recently launched US Private Sector Job Quality Index, over the last 30 years the US jobs market has shifted dramatically towards creating low-wage jobs. In 1990, 53% of jobs could be described as low-wage/low-hour jobs and 47% were high-wage/high-hour jobs. Since 1990, 63% of the jobs created have been low-wage and just 37% were high-wage.

The mix of jobs did recover somewhat after the Great Recession but has been on the slide again since 2017.

Manufacturing, traditionally a creator of higher-wage jobs, lost 12,000 positions in January.


Dominic Rushe

The GuardianTramp

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