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US starts year with job surge, but pay gains are weak

President Donald Trump.Al Drago/The New York Times

Job growth was quick out of the gate in the new year, the government reported Friday, as employers added a healthy 227,000 workers to their payrolls in January. But despite a surge of local minimum-wage increases in states across the country, wage growth was meager.

The official jobless rate rose slightly, to 4.8 percent, but for good cause: More people were lured back into the workforce.

“The labor market started 2017 on the front foot,” said Carl R. Tannenbaum, chief economist at Northern Trust. “This is a good, good number.”

The downside, he added, was a monthly 0.1 percent increase in average hourly earnings, bringing the year-over-year average back down to “its disappointing 2.5 percent trend.”


For policymakers at the Federal Reserve and elsewhere who have been debating whether employment is near capacity and the danger of inflation lurks, January’s report signals that there is still slack in the labor market.

President Trump, who previously dismissed the jobs estimates as “phony numbers,” said Friday that this latest report showed that there was a “great spirit in the country right now.”

Representative Kevin Brady, a Texas Republican, chairman of the Ways and Means Committee, said in a statement: “Today’s jobs report is good news. Our economy is gaining some ground — but we have a lot of work ahead of us to get our economy running at full speed.”

For Americans who have been cut out of the rewards delivered by the nearly eight-year recovery, the economy’s weaknesses are all too clear. A mismatch of skills or location, a lack of support like child care, and employer discrimination are some of the reasons that high school graduates, laid-off factory workers, members of minorities, aging baby boomers, and others have failed to find or regain a comfortable footing in the labor force.


The share of working-age adults who are in the labor force is still at historical lows, but it bumped up to 67.9 percent, a sign that at least some sidelined workers have returned and that still more might consider doing the same. A broader measure of unemployment, which includes the millions who are working part time but would prefer full-time jobs and those so discouraged by rejections that they have given up searching, also rose, to 9.4 percent from December’s 9.2 percent.

Economists at Moody’s Analytics noted in a report this week that at least five other measures, aside from the official unemployment rate, indicated that the economy had not yet reached full employment, including the share of those not in the labor force who want a job, the magnitude of the pool of long-term unemployed, and the degree of wage growth.

Revised estimates from December and November cut 39,000 jobs from previous totals, although other adjustments made by the Labor Department showed the overall job creation for 2016 was better than previously reported.

However strong — or weak — last month’s figures are judged to be, they are a legacy of the Obama administration, based on surveys before Trump took office Jan. 20. Some employers may have made staffing decisions in anticipation of a Republican administration, but this report does not reflect any specific policy changes.