The rise in U.S. nonfarm payroll employment and wage growth beat expectations in January after lower-than-expected jobs growth in December 2017, boosting expectations for a faster pace of rate increases by the Federal Reserve.
Nonfarm payrolls added 200,000 jobs in January, well-above Econoday's consensus estimate of 175,000, and the unemployment rate remained unchanged at 4.1%, in line with expectations.
Average hourly earnings for all employees on private nonfarm payrolls increased by 9 cents to $26.74 and by 75 cents over the year, the Labor Department said.
The 2.9% year-over-year increase in average hourly earnings was well-above expectations of a 2.6% increase — despite two more working days in January 2018 versus December 2017.
Wages are expected to pick up further in the coming months as companies have said the reduction in the corporate tax rate will allow them to offer higher pay, said James Knightley, chief international economist at ING Research.
"It looks more and more likely that we will have to revise up our call for three Fed rate hikes this year to four," he said.
The department revised the total number of jobs added in December 2017 to 160,000 from 148,000. The change for November 2017 was revised down to 216,000 from 252,000.
Total private payrolls increased by 196,000 after adding 166,000 the previous month. The labor force participation rate remained unchanged at 62.7% in January.
The number of long-term unemployed, those who have been jobless for at least 27 weeks, decreased to 1.4 million from 1.5 million. The number of involuntary part-time workers, those who would have preferred full-time employment, increased slightly to 5.0 million from 4.9 million.
Construction added 36,000 jobs, and employment in food, services and drinking places rose by 31,000. The healthcare sector added 21,000 jobs and the manufacturing sector saw job gains of 15,000.
The total number of jobs added over the whole of 2017 was revised up to 2.17 million from 2.06 million.


