(CNSNews.com) - The Labor Department's Bureau of Labor Statistics said the economy added 304,000 jobs last month, higher than analysts were expecting.
The number of employed Americans, 156,694,000, was slightly below last month's record (156,945,000), and the unemployment rate increased a tenth of a point to 4.0 percent.
But the labor force participation rate increased a tenth of a point to 63.2 percent -- the highest it's been on President Trump's watch.
In January, the nation’s civilian noninstitutionalized population, consisting of all people age 16 or older who were not in the military or an institution, reached 258,239,000 (lower than it was last month). Of those, 163,229,000 participated in the labor force by either holding a job or actively seeking one.
The 163,229,000 who participated in the labor force equaled 63.2 percent of the 258,239,000 civilian noninstitutionalized population.
The participation rate was 62.9 percent when Trump took office, and it has showed little change since then, as retiring baby boomers offset additions to the nation's workforce.
In a report released last week, the Congressional Budget Office said it expects the labor force participation rate to stay about where it is now for the foreseeable future. The highest it's ever been is 67.3 percent in 2000, when it began its steady downward drift.
The number of Americans not in the labor force -- meaning they were neither employed nor looking for a job -- dropped by 639,000 to 95,010,000 in January, a move in the right direction.
Wages continued rising last month: In January, average hourly earnings for all employees on private nonfarm payrolls rose by 3 cents to $27.56, following a 10-cent gain in December. Over the year, average hourly earnings have increased by 85 cents, or 3.2 percent.
The change in total nonfarm payroll employment for November was revised up from +176,000 to +196,000; and the change for December was revised down from +312,000 to +222,000. With these revisions, employment gains in November and December combined were 70,000 less than previously reported. But job gains have averaged a strong 241,000 per month over the last 3 months.
Among the major worker groups, the unemployment rate for Hispanics increased to 4.9 percent in January. The jobless rates for adult men (3.7 percent), adult women (3.6 percent), teenagers (12.9 percent), Whites (3.5 percent), Blacks (6.8 percent), and Asians (3.1 percent) showed little change over the month.
2019 employment projections looking good
The Congressional Budget Office, in a report released this week, said it expects last year's strong employment growth to carry into 2019. However, "Strong demand for goods, services, and labor is expected to put upward pressure on price and wage inflation, as well as interest rates, in 2019," CBO said.
According to CBO:
Employment: Nonfarm payroll employment is projected to grow by an average of 148,000 jobs per month in 2019, a decline from 213,000 jobs/month in 2018 but "still a healthy pace of job growth at this stage of the business cycle."
Unemployment rate: The unemployment rate, now at its lowest point since the 1960s, is projected to fall from 3.8 percent in the fourth quarter of 2018 to 3.5 percent by the end of 2019. The anticipated decline in the unemployment rate reflects a continued increase in the demand for labor, which will reduce the number of unemployed workers in the labor force this year.
CBO said the demand for labor and the resulting upward pressure on compensation also encourages people to remain in the labor force or rejoin it, making the labor force larger and thus moderating the decline in the unemployment rate.
Labor force participation: The labor force participation rate, which has hovered around 62.8 percent since 2014, is expected to remain close to that rate during the next two years.
CBO explained that the stability of the labor force participation rate in recent years reflects the balancing of two opposing forces: sustained economic growth, which continues to encourage additional workers to enter the labor force and currently employed workers to stay on the job; and long-run shifts in demographics (particularly the aging of the population).
Labor compensation. After several years of prolonged weakness, wage growth accelerated notably in 2018, CBO noted. Over the next few years, labor compensation is expected to rise further as employment remains at elevated levels and firms must compete for a relatively small pool of unemployed or underemployed workers.
In CBO’s projections, annual growth of the employment cost index for wages and salaries of workers in private industry averages 3.5 percent between 2019 and 2023, slightly more rapid than its 3.3 percent pace in 2018 and considerably more rapid than the 2.0 percent average from 2009 to 2017.