U.S. employers added a robust 200,000 jobs in January, and wages rose at the fastest pace in more than eight years—evidence of a consistently healthy job market.
The unemployment rate remained 4.1%, the lowest level since 2000, the Labor Department said in its monthly jobs report Friday.
The pay gains suggest employers are increasingly competing for a limited pool of workers, and raises stemming from Republican tax cuts and minimum wage increases in 18 states also likely boosted pay last month. The figures point to an economy on strong footing, even in its ninth year of expansion, fuelled by consumer spending and global growth.
The pickup in wages means it’s likelier that the Federal Reserve will raise short-term interest rates more quickly in coming months. In anticipation of inflation pressures and of a possible acceleration of Fed rate hikes, investors sent the yield on the benchmark 10-year Treasury note surging after the jobs report was released.
Read: Fed leaves key rate unchanged at Yellen’s final meeting
The yield reached 2.84, from 2.79 before the jobs report was released. Stock prices were also poised for a sharp drop.
In January average hourly pay rose 9 cents to US$26.74 after an even bigger increase in December. Compared with 12 months earlier, wages are up 2.9%—the biggest gain since the recession ended eight years ago.
Weak wage growth has been one of the economy’s most persistent shortcomings for nearly a decade. But with fewer workers to hire, employers are being forced to raise pay.
Hiring was broad-based last month. Construction companies added 36,000 jobs, lifted by demand for new homes and remodeling.
Manufacturers added 15,000; healthcare, 26,000. Professional and business services, which includes highly paid jobs in engineering and accounting, added 23,000. Restaurants, hotels, bars and entertainment gained 35,000.
Most other recent economic data have also been encouraging. Factories, for example, expanded rapidly in January, according to a survey of purchasing managers, in part because a weaker U.S. dollar and solid growth overseas have boosted U.S. exports.
Many Americans appear confident enough to buy homes: sales of existing houses reached their highest level in 11 years in 2017. At the same time, would-be buyers are struggling to find suitable homes because so few properties are available for sale. The demand for housing helped lift home building in 2017 to its fastest pace in a decade. Construction companies added 210,000 jobs last year, the most in two years.
Housing construction stable in Canada