One of the economic numbers you don’t necessarily want to see slowing … is slowing.
As the numbers came out before the opening bell on Wall Street Friday (Feb. 5), the United States economy created just 151,000 jobs in January — and this is a sign that in the U.S., as it is elsewhere, growth is in a slowdown mode, even though the unemployment rate stands at a decently meager 4.9 percent.
Looking under the hood, a lot of formerly smooth running parts are getting gummy. The total number came in below the 190,000 expected by the consensus. The report also comes not all that long after the Federal Reserve took on the first interest rate hike in well near a decade. But the job growth numbers do not really auger what the Fed might do. Not a quick enough rise to spur more rate hikes to cool off inflationary pressures, and so there’s either nothing to do (likely) or a cut (of course not). And the 151,000 number looks starker when put next to the December and November market, which were revised to 262,000 and 252,000, respectively.
Other than the headline number, there was in fact a cheering bit of data in the wage growth. Reported average weekly earnings were up 12 cents an hour, or 0.5 percent as measured on a monthly basis. On an annualized basis, that is a 2.5 percent increase and more hours are being worked, too, at about 34.6 hours weekly.
As the unemployment rate ticks lower, it’s been partly due to people abandoning the workforce, generally speaking, as much as new jobs are being filled. The labor force participation rate stands at 62.7 percent. By sector, retail was in the forefront of job creation and added about 58,000 positions, with bars and restaurants at 47,000 jobs. Those two sectors, taken as a snapshot, can serve as a decent read across for the payments industry, in terms of hardware (think POS and mPOS).
The job growth there also bodes well for the continued creation of storefronts, a trend that could keep our own Store Front Business Index aloft, and with wages and job growth (two of the three legs of growth we track) standing pretty consistent.