The latest data from the US Bureau of Labor Statistics reveal that the American workforce has increased more than expected in January, but the unemployment rate worsened a notch.
US total nonfarm payrolls increased by 257,000, compared to the median forecast of 236,000. Meanwhile, the readings for November and December were revised upward by a significant margin, from 321,000 to 353,000 (November) and 252,000 to a whopping jump to 329,000 (December).
The unemployment rate was widely expected by analysts to stay at 5.6 percent for the second month, but actual data showed it worsened a notch to 5.7 percent. The number of unemployed Americans, at 9.0 million, barely changed in January.
The industries that garnered the most payroll gains occurred in construction, retail trade, leisure and hospitality, education and health services, professional and business services, manufacturing, and financial activities. The top three gains were seen in education and health services, retail trade, and construction (46,000, 45,900, and 39,000, respectively).
On the other hand, job losses occurred in mining and logging, transportation and warehousing, temporary help services, and government. Transportation and warehousing led the decline with 8,600 job losses, while mining and logging lost a total of 3,000 jobs.
In terms of hours and earnings, average weekly hours for American workers remained at 34.6 hours, while average hourly earnings edged up slightly to $24.75 per hour (and in turn average weekly earnings to $856.35). The Diffusion Index for total private and manufacturing industries slipped to 62.4 and 58.1, respectively, in January compared to the previous month.
At the start of 2015, minimum wages have been raised in 20 states, and this might have played a role in the robust gain seen in the January data. Outlook seems bright moving forward as some large companies like the Gap and Aetna have plans to raise wages for their lowest-paid employees.