U.S. economy exceeds expectations, adds 225,000 jobs in January

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The US economy added 225,000 jobs in January, as the surprisingly strong pace of hiring continues. Meanwhile, the unemployment rate edged slightly higher to 3.6%, as more people decided to look for jobs.

Job growth in the construction, health care, transportation and warehousing industries was particularly strong, according to the report released by the US Bureau of Labor Statistics. Unseasonably mild weather in January helped the construction and transportation sectors, Capital Economics Chief US Economist Paul Ashworth wrote in a note.

But manufacturing jobs declined for the second month in a row. The sector was in a downturn in the last five months of 2019, but factory activity grew in January.

Economists had expected only 160,000 new jobs in January. In 2019, monthly job growth averaged 175,000.

America’s labor force grew by 574,000 people last month, after accounting for annual revisions to estimates of the US population. That influx of workers sent the labor force participation rate up to 63.4%, its highest level since mid-2013.

Now, 61.2% of the US population 16 years and older has a job — the highest level for the employment-population ratio since late 2008.

“So the bottom line is that the unemployment rate only increased because of all the people coming into the labor force, although it’s worth cautioning that was probably a weather effect too,” Ashworth said.

The employment ratio of women aged 25 to 54 climbed to 74.7%, and is nearing the historic high of 74.9% it reached in 2000.

Average hourly earnings rose by 0.2% in January, and 3.1% over the past 12 months.

The January report was the first instance of same-sex married couples being counted in the general married people category.

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