The latest employment report released today by the U.S. Bureau of Labor Statistics showed much better-than-expected growth in payroll jobs, while the unemployment rate stayed unchanged for the fifth consecutive month at 4.1%. The U.S. economy continued its payroll growth in January adding 313,000 jobs. This reflects employment gains in the following sectors: construction, retail, professional and business services, manufacturing, and financial services. The unemployment rate for Blacks declined to 6.9 percent in February, while the unemployment rates for adult men (3.7 percent), adult women (3.8 percent), teenagers (14.4 percent), Whites (3.7 percent), Asians (2.9 percent), and Hispanics (4.9 percent) showed little change.
This hiring trend is taking place amidst one of the longest periods of economic growth, driven by a strong U.S. economy in its nine-year expansion. The increase in construction jobs indicate continued increase in construction spending, especially for residential housing and commercial buildings. The demand for residential construction continues to be strong due to a shortage of housing inventory. Certain markets around Michigan, including Southeast Michigan, Grand Rapids, and Lansing have seen strong residential home construction in 2017, and this is expected to continue well into 2018. The latest employment report reflective of this growth.
Today’s report also showed that average hourly earnings were slightly above the prior month and rose 2.6% in February from a year earlier. Wage growth came in less than expected following an increase in January. In last month’s employment report commentary, I pointed to the fact that the tight labor market may be finally affecting wages. This month’s report shows less pressure on wage growth than expected. Moving forward, skilled worker shortages and weak productivity could hinder companies’ efforts to meet growing demand and expand their operations.