January job growth smashes expectations; firms add 246,000 workers

A January report from ADP is confirming what economists have been projecting for months: American workers will see more jobs and higher wages in 2017.

Mike Blake/Reuters
Job postings are shown outside a new Wal-Mart Super Center as the company opens its first store in Compton, Calif. on Jan. 10, 2017.

The economy over the last year has been on an upswing, with more people working, wages rising, and stock prices soaring. Now, robust January jobs numbers are confirming what economists have been projecting: The employment outlook for 2017 looks bright.

Private employers added 246,000 new workers last month, according to Wednesday's report from payroll software company ADP and Moody’s Analytics, an economic research firm. This is well above the 165,000 jobs that economists expected to see added in January, according to Reuters. It’s also well above the 153,000 jobs added in December, and the second highest jobs-growth month in the past year after June, when employers added 262,000 jobs.

“The US labor market is hitting on all cylinders and we saw small and midsized businesses perform exceptionally well,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, in an online statement. Every month ADP, now in partnership with Moody’s, releases anonymized US nonfarm private-sector payroll data that it collects from its 411,000 client companies.

Analysts found that in January medium-size businesses that have 50 to 499 employees added the most workers: 106,000. This was followed by 83,000 workers added by American corporations with 500 employees or more, and 62,000 jobs added by companies that employ up to 49 people.

By industry, the biggest growth – 201,000 jobs – was in the services sector, particularly in business services, which include administrative and technical support, and transportation. Goods producers – a group that includes manufacturing, construction, energy, and mining companies – had the best month in two years, says ADP, adding 46,000 jobs in January. Partly, the bump in jobs in this sector might be related to a warm January that could have led to an increase in construction last month, Dr. Yildirmaz told the Monitor in an e-mail.

Still, for manufacturing and energy – two industries that President Donald Trump’s administration is aiming to grow – 2017 will bring more progress, though nothing extraordinary, expects Michael Montgomery, an economist with business analytics firm IHS Markit.

“The manufacturing sector will do well but not great in 2017, and doing well beats the 2015 and 2016 lackluster performances by a wide margin,” Mr. Montgomery noted in an e-mail analysis Wednesday.

Moody’s chief economist, Mark Zandi, in a CNBC interview Wednesday dismissed the idea that the jobs growth is related to President Trump’s election and the massive corporate tax and regulatory tax cuts that he has promised. With these promises, the president has been trying to woo (and often pressure) manufacturers to bring overseas factory jobs home – or else.

“I don’t think it has anything to do with the election,” Dr. Zandi told CNBC. “If you look at growth across the world, it’s improved quite substantially.”

Election or not, the jobs growth bodes well for workers, who will see their wages continue to rise into 2017, by some estimates by 3 to 4 percent – barring any global trade wars, resulting from President Trump's proposed tariffs on imports from foreign companies, that could hurt US exporters and their workers.

Wages will rise because there are now more jobs available in the US economy than workers who can fill them, which will grow competition among employers, said Zandi.

“Wage growth is accelerating and it’s going to accelerate more; it’s going to be a workers’ market,” he told CNBC.

 The US Bureau of Labor Statistics will release the government's jobs data, based on a survey of US workers, on Friday.

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

QR Code to January job growth smashes expectations; firms add 246,000 workers
Read this article in
QR Code to Subscription page
Start your subscription today