U.S. payroll gains seem to have stayed firm in January

The U.S. payroll gains are expected to have remained healthy in January. According to a Societe Generale research report, payrolls probably rose by about 170,000, close to the 2016 average of 180,000. The health and education sectors, which averaged 54,000 rise per month from October to December probably remained stable at about 55,000.

About 10,000 jobs might have been added in the retail sector, similar to the financial activities industry. Meanwhile, the leisure and hospitality sector might have added 20,000 jobs, consistent with the recent trend. The business and professional services industry added just 15,000 jobs in December, which is a noticeable deceleration from the trailing three-month average of 65,000. This component is expected to have recovered modestly that might have resulted in a 35,000 rise in the professional and business services sector.

In the meantime, the average hourly earnings were up 0.3 percent in December and are expected to have risen by almost the same magnitude in January. This is likely to have brought the year-on-year rate slightly lower to 2.8 percent from 2.9 percent. There is an added uncertainty element in January. 19 states increased their minimum wage levels as of 1 January.

“Our back of the envelope calculation suggests that this may have boosted total average hourly earnings by 0.021%, so the impact may have been modest. In any case, hours worked may have been flat at 34.3 hours, while the unemployment rate could have remained steady at 4.7%”, added Societe Generale.