US Jobs Reported Growth Despite Government Shutdown

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Last month, the economy of the United States of America added more than 300,000 jobs despite the US government shutdown. The number is considered to be far ahead as compared to the forecasts.

In the United States, jobs have now grown for a record 100 consecutive months, dating back to October 2010.

Despite the forecasts of an additional of 170,000 jobs, non-farm payroll employment figures said that the labour market of the United States gained 304,000 last January,

The average hourly earnings also increased by 3.2 percent year-on-year.

The rate of unemployment rose up to four percent – from the 3.9 percent that was recorded last December – as did the number of people that are unemployed, increasing to 6.5m.

However, the US Bureau of Labor Statistics said that the increase of 175,000 people that are categorised as temporarily laid off included many government employees.

It added that some of the federal workers classified themselves as “employed but absent from work” during the month, which would not have been included in the figures for unemployment.

The data comes after the US Federal Reserve decided to suspend its policy of raising interest rates.

An analyst at the US investment bank Charles Schwab, Kully Samra, stated:  “A tight labour market and healthy wage growth support economic growth, and today’s data should buoy consumer spending and could boost the stock market.”

He added: “However, a string of positive data could lead the Federal Reserve to “un-pause” its rate hike cycle sooner than expected, which would likely result in volatility and pull backs.”

Erik Norland, the senior economist of the CME Group, said that such strong jobs growth may not continue.

He stated: “It’s also possible that today’s strong data will be among the last extremely strong employment reports.”

He added: “Credit spreads have widened somewhat and the yield curve has been flattening.”

Norland continued: “This points towards a moderation in the pace of job creation going forward.”