Business

U.S. economy sees better-than-expected January job gains

Strong hiring in the construction and retail sectors helped U.S. employers add a better-than-expected 227,000 jobs in January, a sign that new President Donald Trump took over a strong labour market.

Average hourly wage gains remained relatively flat

This March 2016 photo shows recruitment tables at a job fair in Pittsburgh. On Friday, the U.S. Labour Department said employers hired a 227,000 people in January, better than economists expected. (Keith Srakocic/Associated Press)

Strong hiring in the construction and retail sectors helped U.S. employers add a better-than-expected 227,000 jobs in January, a sign that new President Donald Trump took over a strong labour market.

According to Reuters, economists had been expecting job growth of 175,000 for the month.

At the same time, more people were looking for work, as the overall unemployment rose slightly to 4.8 per cent from 4.7 per cent in December. The Associated Press reported that the percentage of U.S. adults employed or looking for work hit its highest level since September.

However, there were some negative parts in the report: the U.S. Labour Department said average hourly wages grew by only 0.1 per cent last month, and that the number of people working in part-time jobs who wanted full-time work went up.

"The jobless rates rose, but they did so for a good reason as continued strength in the labor market appears to be bringing in more people off the sidelines to look for work," said TD Bank senior economist Michael Dolega.

"This is a welcome development that economists and policymakers have been anticipating for some time and should provide further arguments for the [Federal Reserve] doves to resist a faster pace of rate hikes," he said in a commentary.

Earlier the week, the U.S. Federal Reserve hit the pause button on interest rate increases, but the central bank sounded more optimistic in tone on the state of the economy overall.

RBC assistant chief economist Paul Ferley said today's report indicates continued robust increases in employment this year.

"Such bodes well for overall GDP growth to continue at an above-potential rate as prevailed over the second half of 2016," he said.

Trump, who took office on January 20, campaigned on a platform of bringing back U.S. jobs that had gone overseas. He has vowed to renegotiate and replace the North American Free Trade Agreement, and threatened to place tariffs on goods imported into the U.S. from Mexico.