January jobs report
The January jobs report indicated a strong improvement in the labor market. Non-farm payroll employment in the United States (SPY) (SPXL) saw an increase of 227,000 jobs in January compared to 157,000 jobs in December.
Key highlights of the jobs report
- Job growth occurred in financial activities, construction, and the retail trade segments.
- The healthcare (XLV) sector added 18,000 jobs in January 2017.
- Professional and business services added 23,000 jobs, and financial services (XLF) added 32,000 jobs in the same month.
- Employment in the construction sector rose by 36,000 in the same month.
Impact on the economy
The labor market saw stronger job growth in January 2017. This employment figure is increasing confidence in the US economy (QQQ) (VOO). The figure is minimizing concerns about a weakness in the labor market. However, the September and October jobs report didn’t meet the market’s expectations. Donald Trump has said that his economic policy aims to create jobs in the United States (SPY) (SPX-INDEX). After strong job growth in January, market participants are expecting that the performance in the labor market will continue in the future.
The Fed’s gradual rate hike
On February 1, 2017, the Fed declared that it wouldn’t change current interest rates. However, it said earlier that there could be three rate hikes in 2017. The Fed’s hawkish tone is indicating that the economy may see a stronger performance in 2017.
In the next part, let’s look at the ADP employment report for January 2017.