The US labour has added more jobs in January but economists seem to be focussed on parts of the report which suggest pay rises are slowing. According to the US Bureau of Labor Statistics 227,000 jobs were created in the non-farm sector in January against expectations of 180,000. The unemployment rate rose from 4.7% to 4.8% as the participation rate rose again, this time from 62.7% to 62.9%.
While the number of jobs created was more than expected, average hourly earnings increased by only 0.1% instead of an expected 0.3% and there were downwards revisions to previous months. On an annual basis, average hourly pay rose 2.5% year on year, down from December’s figure of 2.8%.
Westpac said, “US non-farm payrolls for January recorded a solid number but the detail does not compel the Fed to put March on the table.”. US 10 year yields initially fell substantially when the report was released but they recovered during the rest of the day and closed at 2.47% after a couple of Fed officials reiterated the need for several rate increases this year.