According to the January jobs report, 2019 got off to a strong start. If not for the government shutdown it would have been a total blowout. The economy created 304,000 new jobs last month, the 100th straight month of job gains—well above economists’ expectations of around 170,000.
To place that number in context, this is only the tenth time in those 100 months that the headline job figure has been that high. The January jobs report included a large downward revision to the December estimate, from 312,000 to 222,000, which brings the three-month average job growth figure to 241,000—still a strong number that is well above the level of job growth needed to keep pace with population growth.
1. The jobs report would have been even stronger without the government shutdown
Job growth in January would likely have been even higher, absent the government shutdown. According to the results of a ZipRecruiter survey of 200 employers, the shutdown held up hiring at many private sector companies due to the suspension of E-Verify and delays to background checks. Planned hires that could not be completed in January will now likely roll over into February, adding to next months’ jobs figures.
The shutdown also had the direct effect of furloughing some 380,000 federal workers and suspending numerous federal contracts—the likely reasons for the spike in the unemployment rate and in the number of Americans working part-time for economic reasons. Both are expected to fall again next month.
2. Wage growth is encouragingly strong and broad
Average hourly earnings grew 3.2% over the year, and since workers expanded the number of hours they worked, average weekly earnings grew even faster, by 3.5%. In several low-wage industries, wages grew particularly quickly for production and nonsupervisory employees. For example, wages grew 5.6% for production and nonsupervisory employees in construction, 4.7% for those in leisure and hospitality, and 4.2% for those in mining and logging.
3. Employment rates continue to expand, especially among women
The prime-age employment-population ratio (EPOP) continued its steady rise, up from 79.0% in January of 2018 to 79.9% in January of 2019. While the prime-age EPOP only rose 0.5 percentage points among men from 86.0% to 86.5%, it grew a full 1.3 percentage points among women, from 72.2% to 73.5%.
The massive increase in the employment rate among women is particularly encouraging this late in the recovery, and suggests that improvements in wages and working conditions are continuing to draw Americans off the sidelines.
4. Strong leisure and hospitality employment gains point to strong consumer spending
The leisure and hospitality industry saw a large over-the-month employment gain of 74,000, and an even more impressive over-the-year gain of 410,000—a sure sign that consumers are spending on arts, entertainment, recreation activities, restaurants and hotels. The enduring strength in consumer spending, which makes up about 68% of the economy, should ease fears about the chance of a recession in 2019.
With the Fed indicating that it plans to hit pause on rate increases, jobs growing, wages rising, consumer spending driving new employment growth, and the stock market posting its best January in 30 years, 2019 is set to be a good year for job seekers.
