Tweet
Let the good times roll again! -- 274,000 new jobs
274,000 new jobs were announced this month in the US of A. 193,000 for January and 81,000 in upward revisions to November and December. Overall, the last three months have averaged 229,000 per month -- healthy gains.
Let the good times roll again!
Let the good times roll again!
Jobless Rate Falls To Lowest Level Since July 2001
By CHRISTOPHER CONKEY
Staff Reporter of THE WALL STREET JOURNAL
February 4, 2006; Page A3
WASHINGTON -- Job creation accelerated in January, pushing the unemployment rate to its lowest mark in more than four years and offering fresh evidence that the economy got off to a strong start this year.
The economy created 193,000 nonfarm jobs last month, 53,000 more than in December, the Labor Department said Friday. While the gain fell short of many analysts' expectations, any disappointment was offset by revisions to December and November figures showing 81,000 more jobs were added than originally estimated. Over the past three months, nonfarm payroll employment expanded at a rate of 229,000 a month.
The jobs report had even better news for workers. The demand for workers sent the unemployment rate to 4.7% from 4.9% in December, its lowest level since July 2001, and the average hourly wage rose to $16.41 from $16.34. Compared with January 2005, hourly pay rose 3.3%, a near three-year high that puts the rate of yearly wage growth roughly in line with the 3.4% annual inflation rate.
[Looking Stronger]
Together with a recent spate of positive indicators, particularly in the manufacturing sector, the employment report points to a newly vigorous economy after the fourth quarter's lull. The main reason: Consumers propel 70% of the economy with their purchases, and wage growth generally leads to higher spending.
The Federal Reserve will pore over the jobs report to gauge how much pressure higher wages will put on prices, which could lead to inflation. Most analysts interpreted Friday's jobs report as an indication that Fed policy makers will raise interest rates again next month, although there is much debate over whether it should.
"Wage inflation is without a doubt the No. 1 enemy for the Fed. It's the most difficult kind of inflation to get rid of," said Bernard Baumohl, executive director of the Economic Outlook Group in Princeton, N.J. "I don't think we're there yet, but the Fed has to act pre-emptively....They're in that zone that's flashing a yellow light that says we're about to see higher wages and inflation down the road."
The report, along with a drop in consumer sentiment, contributed to Friday's decline in stock prices because it adds to investors' concerns that the Fed will continue to raise rates. The Dow Jones Industrial Average finished the day down 58.36 points to 10793.62. The University of Michigan's consumer-sentiment index fell to 91.2 in January from a final reading of 91.5 in December, as consumers fretted about oil prices and the economy's slowdown in the fourth quarter.
In futures-market trading, the likelihood that the Fed will raise rates to 4.75% from 4.5% rose to 86% from 80% after the payroll report was released. The probability of another rate increase to 5% in May jumped to 59% from 45%.
Job gains were spread throughout the economy in January. Bars and restaurants added 31,000 workers, health-care facilities added 29,000, and the financial-services sector created 21,000 jobs. Construction payroll soared by 46,000, the 12th consecutive monthly increase for the sector, spurred on by favorable weather conditions and rebuilding projects in Gulf Coast areas devastated by Hurricane Katrina last summer.
Meanwhile, the Commerce Department said Friday that factory orders rose $4.5 billion, or 1%, following a 3.3% gain in November. Orders for durable goods like refrigerators, trucks and computers were up 1.8% in December, even higher than the initial estimate, while orders for nondurable goods like food and petroleum rose 0.3%.
Also Friday, the Institute for Supply Management said its monthly index of nonmanufacturing activity declined to 56.8 in January from 61.0 in December. The January measure was the 34th consecutive monthly reading over 50, a threshold that indicates continued expansion.
By CHRISTOPHER CONKEY
Staff Reporter of THE WALL STREET JOURNAL
February 4, 2006; Page A3
WASHINGTON -- Job creation accelerated in January, pushing the unemployment rate to its lowest mark in more than four years and offering fresh evidence that the economy got off to a strong start this year.
The economy created 193,000 nonfarm jobs last month, 53,000 more than in December, the Labor Department said Friday. While the gain fell short of many analysts' expectations, any disappointment was offset by revisions to December and November figures showing 81,000 more jobs were added than originally estimated. Over the past three months, nonfarm payroll employment expanded at a rate of 229,000 a month.
The jobs report had even better news for workers. The demand for workers sent the unemployment rate to 4.7% from 4.9% in December, its lowest level since July 2001, and the average hourly wage rose to $16.41 from $16.34. Compared with January 2005, hourly pay rose 3.3%, a near three-year high that puts the rate of yearly wage growth roughly in line with the 3.4% annual inflation rate.
[Looking Stronger]
Together with a recent spate of positive indicators, particularly in the manufacturing sector, the employment report points to a newly vigorous economy after the fourth quarter's lull. The main reason: Consumers propel 70% of the economy with their purchases, and wage growth generally leads to higher spending.
The Federal Reserve will pore over the jobs report to gauge how much pressure higher wages will put on prices, which could lead to inflation. Most analysts interpreted Friday's jobs report as an indication that Fed policy makers will raise interest rates again next month, although there is much debate over whether it should.
"Wage inflation is without a doubt the No. 1 enemy for the Fed. It's the most difficult kind of inflation to get rid of," said Bernard Baumohl, executive director of the Economic Outlook Group in Princeton, N.J. "I don't think we're there yet, but the Fed has to act pre-emptively....They're in that zone that's flashing a yellow light that says we're about to see higher wages and inflation down the road."
The report, along with a drop in consumer sentiment, contributed to Friday's decline in stock prices because it adds to investors' concerns that the Fed will continue to raise rates. The Dow Jones Industrial Average finished the day down 58.36 points to 10793.62. The University of Michigan's consumer-sentiment index fell to 91.2 in January from a final reading of 91.5 in December, as consumers fretted about oil prices and the economy's slowdown in the fourth quarter.
In futures-market trading, the likelihood that the Fed will raise rates to 4.75% from 4.5% rose to 86% from 80% after the payroll report was released. The probability of another rate increase to 5% in May jumped to 59% from 45%.
Job gains were spread throughout the economy in January. Bars and restaurants added 31,000 workers, health-care facilities added 29,000, and the financial-services sector created 21,000 jobs. Construction payroll soared by 46,000, the 12th consecutive monthly increase for the sector, spurred on by favorable weather conditions and rebuilding projects in Gulf Coast areas devastated by Hurricane Katrina last summer.
Meanwhile, the Commerce Department said Friday that factory orders rose $4.5 billion, or 1%, following a 3.3% gain in November. Orders for durable goods like refrigerators, trucks and computers were up 1.8% in December, even higher than the initial estimate, while orders for nondurable goods like food and petroleum rose 0.3%.
Also Friday, the Institute for Supply Management said its monthly index of nonmanufacturing activity declined to 56.8 in January from 61.0 in December. The January measure was the 34th consecutive monthly reading over 50, a threshold that indicates continued expansion.
Comment