Unemployment Rate Will Probably Finish 2015 Just Over 5%: Economist
NEW YORK (TheStreet) -- The labor market is showing all kinds of strength.
Aside from job growth topping estimates in January, employment data for November and December were revised higher: an extra 70,000 and 77,000 jobs, respectively, the Bureau of Labor Statistics said.
The labor market seems more intact than previously thought and the momentum is set to continue.
"We're going to see the unemployment rate decline over the course of the year," said John Lonski, chief capital markets economist at Moody's Analytics. "It's probably going to finish the year just above 5%, and that represents a fuller utilization of the labor force."
While January's jobs growth was slightly higher than the average monthly job growth of 246,000 in 2014, moving the labor market forward will take more than just the status quo.
"The January number leaves something to be desired as we remind our readers the U.S. labor market needs on average 200,000 to 250,000 jobs on a monthly basis just to cover population and demographic change," wrote Sterne Agee chief economist Lindsey Piegza in a Friday morning note.
Aside from job creation, another bright spot in the labor market surrounds average hourly earnings, which grew 0.5%, beating forecasts of 0.3% and roaring past December's disappointing 0.2% decline.
On a year-over-year basis, wages grew 1.7% in December and 2.2% in January.
"This particular statistic has been volatile as of late," Lonski added. "Who knows, it may drop down to 2% or lower in February."
Economists generally caution drawing broad conclusions from just one jobs report. Amid the growth in jobs and wages, concerns over weak productivity could pose headwinds for the market going forward in 2015.
"There is weak growth of productivity and when you combine that with the possibility of lower than expected corporate earnings, you could find the average monthly addition to payrolls declines from the first half to the second half, though I don't think we're in any danger of increases in the unemployment rate."
