An improving job market drew more Americans off the sidelines and back into the labor market last month as the U.S. economy added 257,000 jobs, handily beating analysts’ expectations, according to Friday’s job report from the U.S. Department of Labor.
Employment gains for November and December were also revised up by 147,000, marking the best three-month period for job growth in 17 years, according to figures from the labor department’s Bureau of Labor Statistics.
The unemployment rate edged up to 5.7 percent from 5.6 percent in December, driven mainly by a surge in labor force participation of about 700,000.
The spike in the labor force participation rate to 62.9 percent from 62.7 percent in December indicates more people are confident in their job prospects and are working or actively seeking work even though they haven’t been fully absorbed by the labor market, said Greg Lawson, a labor market expert with the Buckeye Institute for Public Policy Solutions in Columbus.
“You want to see jobs going up and an increase in the labor force,” Lawson said. “Initially, it’s OK to see the unemployment rate pick up if it’s because of labor force participation. Compared to where we have been historically, labor force participation is still relatively low, but this could be a sign that it may start turning around.”
A bigger concern than the rate of job growth is the quality of jobs being added, Lawson said.
Job growth nationally and in Ohio — where the unemployment rate stands at 4.8 percent, its lowest since September 2001 — is still concentrated in the low-wage retail and restaurant industries.
Nationwide, the retail trade notched the biggest gain in nonfarm jobs last month, adding 46,000 new positions, while employment in food services and drinking places was up by 35,000, according to figures from the labor department’s Bureau of Labor Statistics (BLS).
But job growth has started to pick up in some higher-paying industries. Health care employment, for example, increased by 38,000 last month, after averaging about 26,000 jobs per month in 2014. Employment in financial activities rose by 26,000 in January, after averaging just over 13,000 the past 12 months, according to the BLS.
The trend help pushed up average hourly earnings by 12 cents to $24.75 — the biggest jump in wages since November 2008. Over the year, however, average hourly earnings have risen by a mere 2.2 percent.