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200K jobs added in January, pay increases highest in 8 years

200K jobs added in January, pay increases highest in 8 years

The robust employment report underscored the strong momentum in the economy, raising the possibility that the Federal Reserve could be a bit more aggressive in raising interest rates this year.

Jobs numbers for 2017 were revised upward from 2.055 million to 2.173 million, a growth of about 118,000 more jobs previous year than was initially estimated, The Wall Street Journal reports.

Meaning, that even if wage growth is picking up it is canceled out by inflation when it comes to real wages.

Jason Patrick, who owns the Nashville, Tenn., office of Express Employment Professionals with his wife, said the tightening labor market means more workers are jumping to new jobs compared with recent years.

Kate Bahn, an economist at the left-leaning Center for American Progress, attributes last month's larger-than-usual pay boost to state measures that led to larger checks for more workers.

Economists suggest the rise in wages shows employers are getting more competitive in their efforts to retain skilled workers. "This is new for many employers".

One-time bonuses, which many other companies have given out, are not counted in the wage growth calculation. Yellen will be succeeded as Fed chair on Monday by Jerome Powell, a former investment banker and Fed governor.

"The gain in wages will add to concerns that inflationary pressures are building in the economy", said Michael Feroli, chief U.S. Economist at JPMorgan Chase, who correctly projected the payrolls gain. That forces employers to offer higher pay to attract and keep workers.

But black unemployment, which had been sitting at a record-low 6.8 percent, jumped to 7.7 percent last month, well above the 3.5 percent for whites.

The report comes three days after President Donald Trump delivered his first State of the Union address, citing the strength of the American economy, particularly in blue-collar sectors. Average hourly earnings, which had been rising at a modest 2.5 percent in the recovery, increased by 2.9 percent from the year before.

US payrolls expanded by 200,000 last month, driven by hiring in construction, food services and health care, the US Labor Department said. The industry has added 255,000 jobs in the past 12 months. Now, a decade later, it still remains below 3 percent. Leisure and hospitality firms, which include restaurants and hotels, increased pay 3.5 percent. Over the year, construction employment has increased by 226,000.

With Americans more confident and spending more, restaurants are adding jobs and lifting wages. Health care businesses added 21,000 new hires.

However, some areas in the USA are seeing higher wage growth than others. Average hourly wages rose 9 cents in January after December's 11 cent-per-hour gain.

Hiring at construction sites picked up last month despite unseasonably cold weather. Frontline construction workers might have stayed home during the cold spell, cutting into their pay, while salaried supervisors would have been paid either way.

In one case, Trump tweeted about the record-low rate in response to criticism from the rapper and businessman Jay-Z. A quarterly measure of wages and salaries in the private sector, released Wednesday, showed that they increased in the October-December quarter by the most in almost three years.

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