January was expected to be a far stronger month for payrolls than December with adverse weather conditions gone, and that’s precisely what the BLS unveiled as employers added 200,000 jobs in January, while more importantly the average hourly earnings for workers rose 2.9% from a year earlier, to $26.74 from $25.99, even if this was largely the result of a sharp drop in hours worked.
So which sectors were responsible for the rebound in January employment?
As SouthBay Research summarizes, solid payroll strength was observed in Durable Goods Manufacturing (+18K) reflecting the generally stronger manufacturing environment.
Meanwhile, services was hit by weakness in Accounting and Education. Accountant hiring typically picks up in January but this year Accounting payrolls were softer than normal.
As a result, Accounting payrolls (seasonally adjusted) actually fell (-10K) in January. This development is particularly strange in light of the recent tax law changes that always boosts demand for accounting and bookkeeping support.
Also contributing to the softness was deeper-than-normal seasonal layoffs in Education payrolls (Winter break).
Pointing to underlying consumer spending is the boost in Construction (+36K) and Leisure/Hospitality (+35K). Businesses appear to be responding to continued strong consumer spending and hiring accordingly.
Meanwhile, Retail was soft (+15K) but that’s to be expected in light of the ongoing brick-and-mortar problems (i.e. the long-running debate if it’s a channel issue – Amazon – or consumer spending issue – record low savings).
Employment in food services and drinking places continued to trend up in January (+31,000); the industry has added 255,000 jobs over the past 12 months. Meanwhile, employment in manufacturing remained on an upward trend (+15,000) with Durable goods mfg industries adding 18,000 jobs.
Finally, as , below are the industries with the highest and lowest rates of employment growth for the most recent month: monthly growth rates are shown for the prior year.