MNI DATA ANALYSIS: US January Payrolls Rise 304k, 4.0% Rate>

--Unemployment Rate Rises On Lower Employed, Higher Unemployed 

--Hourly Earnings +0.1% After +0.4% in December, Y/Y Rate At 3.2% 

By Kevin Kastner, Shikha Dave and Harrison Clarke

     WASHINGTON (MNI) - The January employment report was much stronger 

than expected, with nonfarm payrolls surging by 304,000 compared with 

the 167,000 increase expected by analysts and the 191,000 gain expected 

by market participants, data released by the Bureau of Labor Statistics 

Friday showed. 

     However, there was a net 70,000 downward revision in the previous 

two months and a net 78,000 downward revision to the previous four 

months when annual revisions are incorporated, with the bulk of that 

coming from a 90,000 downward revision to December's sharp gain, which 

now stands at 222,000. 

     The unemployment rate rose to 4.0% from 3.9% in December, while the 

labor force participation rate rose by 0.1pp to 63.2% in January. The 

labor force fell by 11,000, with household employment down 251,000 and 

unemployed up 241,000. 

     The U-6 unemployment rate rose by 0.5pp to 8.1%. The furloughed 

government workers were considered as "unemployed on temporary layoff," 

totaling 937,000 this month, up from 762,000 last month. This impact 

should reverse in the February data, as the next date for a government 

shutdown to begin, February 15, would still allow these workers to be at 

work during the entire survey week. 

--PRIVATE PAYROLLS POST STRONG GAINS

     Private payrolls rose by 296,000, compared with a 175,000 gain 

expected, on large gains in construction, education and health services, 

leisure and hospitality, and retail, as well as smaller gains in most 

other categories. Government payrolls rose by 8,000 in the month, with 

Federal Government payrolls up 1,000. The BLS had already announced that 

these workers would be categorized as employed due to the expectation 

they would receive backpay. 

     Hourly earnings rose 0.1% after an unrevised 0.4% gain in December. 

Analysts had expected a 0.2% rise in the month, while markets were 

further off with their 0.5% whisper number. The 12-month pace for 

earnings now stands at 3.2%. The annual pace of wage growth remains 

ahead of core inflation growth and is likely to inch higher as the labor 

market remains tight. 

     ** MNI Washington Bureau: 202-371-2121 ** 

[TOPICS: MAUDS$,M$U$$$,MT$$$$]