U.S. companies beat expectations in the government’s latest jobs report, hiring 257,000 workers in January. The Labor Department also raised job gains in the previous two months by 150,000 jobs.
Although the job growth was strong, it wasn’t enough to lower the unemployment rate, which rose slightly to 5.7 percent. But analysts say last month's job numbers reinforce the notion of a steadily improving U.S. economy, at least for now.
The solid January hiring numbers marked the longest consecutive stretch of job growth above 200,000 per month in more than two decades, something U.S. Treasury Secretary Jack Lew reminded lawmakers of this week.
“The fact is our businesses created nearly 3 million jobs last year, the most jobs in any year since the late 1990s,” he said.
Job gains came across the board — in retail, construction and health care. But not only did private sector hiring increase, so did average wages, which rose 12 cents an hour.
That’s worth noting, said Mark Hamrick, Bankrate.com’s Washington bureau chief.
“I think we continue to need to watch for sustained income gains, because we have remarkably low inflation in the United States right now," he said. "And right now, income gains are rising at a pace that is above inflation, and that’s a very positive development. But keep in mind it’s been many years where Americans have not seen a significant improvement in their household incomes.”
The unemployment rate did inch higher last month, but economists say that’s because more people started looking for work. Analysts expect new hires will fuel the U.S. economy in the next two quarters. After that, it's anybody's guess.
Max Wolff, chief economist at Manhattan Venture Partners, said the general expectation "is that we are going to continue to see some strong numbers under the U.S. macroeconomy through Q1 into Q2 [from January to June 2015], and then the weakness in the rest of the world is going to catch up with us."
Despite the healthy job numbers, U.S. stocks were down Friday as investors pondered the possibility that the U.S. Federal Reserve could start raising interest rates sooner — as the economy improves.