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Warm Weather Heats Up Hiring in January, but Unemployment Rises

Doug Whiteman
Warm Weather Heats Up Hiring in January, but Unemployment Rises

Mild weather last month did more than keep heating bills down and keep winter coats in closets. It also helped builders crank up construction and boosted business at restaurants with outdoor seating .

As a result, the job market was booming.

The government says hiring was surprisingly strong in January, and unemployment remained close to its lowest level in half a century.

So if you need a job or would like to move up to a better one, maybe in another city, make sure your resume is in top shape because it's a great time to be looking.

Hiring jumps in January

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Hiring was much better than expected last month.

America's employers added 225,000 jobs to their payrolls in January — much better than the experts were expecting, and well above the 147,000 jobs the economy added during December.

Hiring was helped by unusually warm weather in much of the country last month. That was especially true for manufacturing — January's biggest gainer, with 44,000 new jobs.

"Heavy snow storms and cooler temperatures usually cause more disruptions to construction activity during the winter months than we have seen so far this year," notes Diane Swonk, chief economist with the accounting firm Grant Thornton.

Health care grew by 36,000 jobs last month. "The health care hires largely reflect the demographics of aging and the need for more health care personnel," writes Swonk, on her blog.

Leisure and hospitality also boosted hiring by 36,000, with part of that due to the warm-weather effect on restaurants. Swonk says the report doesn't reflect the impact on the industry from the coronavirus crisis overseas.

"Reports of layoffs at hotels and across the travel industry have increased in the wake of the drop in tourism from China," she says. "Those losses will show up in next month’s report."

Manufacturing employment shrank by 12,000 jobs last month, mostly because of layoffs at car plants.

Unemployment ticks up but remains very low

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Unemployment inched higher as more people entered the job market.

Though hiring was humming last month, the nation's unemployment rate edged higher — to 3.6% from December's 50-year low of 3.5%.

Here's a reason for the slight increase in joblessness: The government says 574,000 people entered the nation's job market in January. They couldn't all find work, so more people were counted as unemployed.

"The unemployment rate rose for the right reason, last month as well as over the last year," says Elise Gould, senior economist at the Economic Policy Institute. "More people keep getting pulled in off the sidelines, as we get closer to full employment."

Gould says the nation's jobless rate has been either at or below 4% for nearly two full years.

Are you one of the 3.6% of Americans who are out of work? Try searching for opportunities among the fastest-growing jobs in America.

Raises are still pretty shabby

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Americans' paychecks aren't growing much.

Even as they struggle to find skilled workers during a time of high employment, employers continue to hold out on paying more.

Average hourly earnings in the U.S. rose 7 cents in December, to $28.44. Americans' wages grew by 3.1% during the past year — which is weak but ahead of the inflation rate.

The growth in wages would have been even more meager had it not been for increases in the minimum wage that took effect in many states and cities with the new year, Gould says.

If you think your boss is paying you less than you're worth, take a look at these eight power moves to negotiate a raise.