This morning’s Bureau of Labor Statistics (BLS) data show that U.S. employers hired 225,000 additional workers in January on net, confirmation that employment growth remains solid. As I mentioned yesterday, the BLS issued its final benchmark revisions to total nonfarm payroll employment as part of today’s report. The benchmark revisions use state unemployment insurance tax records and came in a bit higher than initially reported. The downward revision of 514,000 fewer jobs in March of 2019 represents a meaningful slowdown from initially released job growth. Average monthly job growth in 2019 was 175,000—still weaker than 2018’s average growth rate of 193,000, even considering these benchmark revisions, which disproportionately lowered 2018 data. Payroll employment reflected a loss in manufacturing jobs over the past month (-12,000) as well as gains in construction (+44,000) and education and health services (+72,000).

The unemployment rate ticked up slightly to 3.6% from 3.5% in December. This is the 23rd month in a row when unemployment has been at-or-below 4.0%. The labor force participation rate ticked up slightly as well as the employment-to-population ratio, which is an indication that the unemployment rate rose for the right reason, last month as well as over the last year. More people keep getting pulled in off the sidelines, as we get closer to full employment.

Unfortunately, this tightness isn’t translating into stronger wage growth. Nominal wages rose 3.1% year-over-year in January, likely reflecting the increases in state and local minimum wages that took effect in January. December’s weaker wage growth for production nonsupervisory workers now appears to be a bit stronger in January with year-over-year wage growth increasing to 3.3%. Overall, wage growth is still slower than expected in an economy that has had historically low unemployment and remains the most important indicator to watch in 2020.