January Jobs Report: Wage Growth Hits Fastest Pace in Eight Years
The latest jobs numbers are out from the federal government. What do they mean for job seekers and employers? Here’s a quick take from Glassdoor’s Chief Economist Dr. Andrew Chamberlain:
This morning’s jobs report revealed a booming start to 2018, with 200,000 new jobs created in January and an unemployment rate steady at 4.1 percent, a 17-year low.
That healthy pace of job growth was mostly on target with analysts’ expectations, in the wake of the $1.5 trillion tax cut bill and strong economic growth both in the U.S. and around the world today.
One particular bright spot in the January jobs report is wages. Average hourly earnings rose 2.9 percent from one year ago — the fastest pace of overall U.S. wage growth since June 2009, more than eight years ago.
As the labor market teeters on the edge of full employment today, employers in many sectors are struggling to fill open roles. Today’s strong wage gains suggest that’s beginning to translate into sustained pay growth for more American workers in key in-demand fields. According to the Glassdoor Local Pay Reports, workers in e-commerce, health care, tech, and some low-skilled roles are seeing the fastest wage gains in America today.
One surprise today was healthy job growth in the beleaguered retail sector, with retailers adding 15,400 new jobs in January. That sector is experiencing tumultuous change today, with e-commerce disrupting many commodity-style big-box retailers, but also creating growth opportunities for smaller, “experience” retailers with better in-store experiences and expert sales staff.
This biggest job gains recorded in January 2018 were in construction (+36,000 jobs), leisure and hospitality (+35,000 jobs), health care (+25,800 jobs), and professional and business services (+23,000 jobs). The weakest job growth was in information (which includes most media) (-6,000 jobs), nondurable goods manufacturing (-3,000 jobs), utilities (-1,400 jobs), and motor vehicles and parts (-300 jobs).
Today’s strong jobs report is more evidence of the many tailwinds propelling the U.S. economy forward in 2018, including the recent passage of a $1.5 trillion tax cut, a booming stock market that’s growing many Americans’ 401(k) plans, rising oil prices that are sparking renewed life in the energy sector, and strong consumer sentiment. Looking ahead, the wildcard in 2018 is Fed interest rate policy, with all eyes on the new Fed leadership and their willingness to allow the economy to continue to run hot throughout the coming year.
To speak with Dr. Andrew Chamberlain about today’s jobs report or to discuss labor market trends, contact pr at Glassdoor dot com. For the latest economics and labor market updates, follow @adchamberlain on Twitter and subscribe to Glassdoor Economic Research.