The further moderation in wage gains should give the U.S. Federal Reserve some comfort in its fight against inflation
U.S. job growth accelerated sharply in January amid a persistently resilient labor market, but a further moderation in wage gains should give the Federal Reserve some comfort in its fight against inflation.
Average hourly earnings rose 0.3 per cent after gaining 0.4 per cent in December. That lowered the year-on-year increase in wages to 4.4 per cent from 4.8 per cent in December. Economists polled by Reuters had forecast payrolls increasing by 185,000 jobs and wages advancing 4.3 per cent year-on-year. Payrolls forecasts ranged from an increase of 125,000 to 305,000.
The BLS revised their industry classification system, which resulted in about 10 per cent of employment reclassified into different industries. It also incorporated new population estimates in the household survey, from which the unemployment rate is derived. The employment report should allow the U.S. central bank, focused on wage inflation, to maintain a moderate pace of rate hikes and reduce the risk of a recession this year.
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