Momentum continues in January jobs report

Job creation keeps showing momentum nationally (Arizona’s lackluster economy notwithstanding). Steve Benen breaks down the January jobs report, January jobs report offers more good economic news:

Headed into this morning, economists on Wall Street expected job growth in January of about 230,000, which would be consistent with a steadily improving employment landscape. As it turns out, the news was even better than that.

The new report from Bureau of Labor Statistics shows the U.S. economy added 257,000 jobs in January. The overall unemployment rate inched higher, from 5.6% to 5.7%, but this was an encouraging increase — more Americans are [returning to] the labor market again.

Once a year, the BLS publishes benchmark revisions, going back and recalculating monthly job totals for all of the previous year, and that report was released today. And on this front, the news was even better — November’s totals were revised up from 353,000 to 423,000, while December’s figures were revised up, from 252,000 to 329,000. Combined, that’s an additional 147,000 jobs.

All told, January’s totals may not be quite as stunning as the figures from November and December, but this is still a strong jobs report. Indeed, wage increases last month were the best Americans have seen in six years.

Just as important, we now know 2014 was an even more impressive year than we’d realized, the U.S. economy added over 3.1 million jobs overall and 2.86 million in the private sector. What’s more, January was the 52nd consecutive month of positive job growth — the best stretch since 1939 — and the 58th consecutive month in which we’ve seen private-sector job growth, which is the longest on record.

Last year was easily the best year for U.S. job creation since 1999, which Republicans may struggle to explain in light of the Affordable Care Act, higher taxes, and federal regulations.

Neil Irwin at the New York Times Upshot adds, This Is a Great Jobs Report Across the Board:

[T]he beauty in this report was in the more subtle indicators it offered. That uptick in the unemployment rate? It happened not because fewer people had jobs, but because the size of the labor force rose by a whopping 703,000 in January after annual population adjustments. That was enough to drive upward the proportion of Americans in the labor force and the proportion holding a job.

And while the rate of job creation was consistent with recent readings, the best news was in revisions to previous months, when the nation added 147,000 more jobs than the Labor Department earlier estimated. The nation is now estimated to have added 423,000 jobs in November and 329,000 in December, making them truly blockbuster months for job growth in the United States.

And finally — finally — there was meaningful evidence that an improving job market was translating into higher pay for workers. After a disappointing drop in December, average hourly earnings rose 0.5 percent in January, the strongest since 2008. It seems more plausible that the December drop was a false signal and that there was actually a smaller, consistent gain in hourly wages both months.

If you’re an American worker, this is a sign that businesses really are hiring in significant numbers, and are starting to recognize that it’s not 2009 anymore. To attract and retain quality workers, firms are starting to have to offer raises that are higher than inflation. Over the last year, average hourly earnings are now up 2.2 percent, comfortably higher than the rate at which consumer prices have risen.

* * *

For years, we’ve been waiting for evidence that wages will rise and that some of the millions of people who left the labor force in the last several years will return. And we got it on Friday, with all that implies.

Arizona’s Tea-Publican legislature and governor cannot get out of their own way on economic polices that create jobs and raise incomes. But at some point an improving national economy will have a positive effect on Arizona’s economy — it’s the old “a rising tide lifts all boats” analogy from President John F. Kennedy. This improvement will have nothing to do with the regressive economic policies of Arizona’s Tea-Publican legislature and governor.