US Labor Market Maintains Resilience: Unemployment Falls, Wages Rise
The US labor market remains robust, with unexpected declines in unemployment and stronger-than-anticipated wage gains. The Bureau of Labor Statistics' January report revealed:
* Unemployment rate fell to 4% from 4.1%, the lowest since May 2024.
* 143,000 new jobs created, beating December's revised figure of 307,000.
* Wages increased 4.1% year-over-year, surpassing the 3.8% forecast.
* Monthly wages rose 0.5%, exceeding the 0.3% in December.
* Labor force participation rate increased to 62.6%.
Economist Stephen Brown believes this resilience "keeps the Fed on the sidelines" in terms of interest rate cuts in 2025. Market expectations for the Fed holding rates steady through May have increased to 67%.
Despite a slowdown in job hiring, layoffs remain low, reflecting a "broadly stable" labor market as described by Fed Chair Powell. Overall, the report suggests ample job opportunities and rising wages, indicating a positive labor market outlook.