U.S. employers added 200,000 jobs in January and unemployment held steady at 4.1 percent, federal economists reported Friday, as the economy continued making the slow but steady improvements that have characterized the post-recession period.
Wages in January were 2.9 percent higher than they had been a year ago. Average hourly wages rose 9 cents in January after December’s 11 cent-per-hour gain.
Workers have been waiting years for wage gains, which lagged for the years after the Great Recession amid steady job growth and a steadily improving stock market. Economists have expected low unemployment would produce increased wages, with employers eager to retain and attract workers now that the pool of available labor is far smaller.
Catherine Barrera, chief economist at the job site ZipRecruiter, said employers are starting to adjust wage practices.
“The labor market is really tightening,” she said. “You do see wages rising, though more quickly in certain geographic areas.”
How healthy is Trump’s economy?
Kate Bahn, an economist at the left-leaning Center for American Progress, attributes last month’s larger-than-usual pay boost to state measures that led to larger checks for more workers.
“Minimum wage increases go into effect in January,” Bahn said. “That could explain a lot of this.”
Eighteen states increased their minimum wages in January, including Ohio, Florida, Washington and Maine. These changes affected 4.5 million workers, according to research from the Economic Policy Institute, a Washington think tank.
The unemployment rate has hovered at the lowest levels since the final months of Bill Clinton’s presidency in 2000. It has been slowly declining since a peak of 10 percent in 2009.
Analysts caution against drawing overly broad conclusions from a single report, saying the long-term averages provide a better gauge of the country’s economic vitality.
Politicians, however, often cite the figure to defend their stewardship of the economy or criticize their rivals.
President Trump has frequently touted job growth during his administration as proof he’s delivering the economic renaissance he promised during his campaign. So far, however, job growth under Trump has been similar to the growth under President Barack Obama. U.S. employers added 2.1 million jobs in 2017, compared with 2.2 million in 2016.
Trump had also claimed credit for declining unemployment among African Americans, noting in his State of the Union address it had reached the “lowest levels in history.”
The decline appears to have hit a bump. The unemployment rate among African Americans went to 7.7 percent in January, up from 6.8 percent in December.
[The black unemployment rate spiked in January, muddling Trump’s message]
Black unemployment had been declining steadily from a high of 15.5 percent in 2010. For Hispanics and Latinos, the figure was 4.9 percent, down from 12.9 over the same period.
Michelle Holder, an assistant economics professor at John Jay College of Criminal Justice at City University of New York who follows these trends, noted black unemployment has fallen each year for the last eight.
“The declining trend in unemployment overall and among African Americans is something President Trump inherited,” she said. “When he came into office, it was already on the decline.”
Holder said it’s too early to attribute these trends to Trump-era policies, adding that lawmakers should look beyond the statistics and more closely examine America’s working conditions.
Other factors beyond federal policy influence job growth, including the business cycle, consumer confidence and international economic conditions. Many economists are looking at the role of automation in the changing workforce.
The January jobs figure will be revised twice in coming months after the initial estimate is released.
In Friday’s report, federal economists slightly adjusted their December estimate, now saying 160,000 jobs were added rather than their initial estimate of 148,000. They also released a final estimate for November, revising it down to 216,000 from a previous figure of 252,000.
The figures have a margin for error of about 100,000 in either direction, another reason economists advocate looking at longer-term averages over single month reports.
Bureau of Labor Statistics analysts make their estimates based on a sample of employer payrolls, and the estimate is recalculated as more companies submit their information.
The unemployment rate is calculated based on a separate survey of households.