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Economists were upbeat about the January jobs report, saying the mix of strong growth and low inflation theoretically represented market-friendly data.
“It’s up and it’s good,” said Guy LeBas, chief fixed-income strategist for Janney Capital Management, in a tweet. Job growth without wage inflation risk continues to be the story, he noted.
The U.S. economy added 225,000 jobs in January, well above expectations in a MarketWatch survey of a 165,000 increase. Economists said they thought the payroll gain was boosted by warm weather.
Read: U.S. labor market shows resilience
The increase in worker pay over the past 12 months rose slightly to 3.1%, below the postrecession peak of 3.5%.
The boost in wages will support continued household spending, said Jeffrey Rosenberg, senior portfolio manager, systematic fixed income at BlackRock.
Education and transportation were strong. Retail wasn’t as weak as it could have been, Rosenberg said.
The unemployment rate ticked up to 3.6% in January from 3.5% in the prior month. But even this was seen as positive because it was due to a pick up in workers re-entering the labor market, said Nick Bunker, economic research director at Indeed Hiring Lab.
Ian Shepherdson, chief economist at Pantheon Macroeconomics, said there is a bit of a puzzle emerging as job growth continues to outperform surveys of the economy’s performance.
That could mean the surveys are wrong or payroll growth is going to slow sharply in the next few months, he noted in a tweet.
Many economists think the Federal Reserve will keep its benchmark interest rate steady this year given the more upbeat economic outlook.
Stocks DJIA, -0.68% were trading lower. Analysts suggested that the market was discounting the strong payroll gain due to weather.
The 10-year Treasury yield TMUBMUSD10Y, -3.37% has slipped to 1.58%.
