With unemployment at a 17-year low, there are fewer job-seekers for businesses to hire.
U. S. employers added a robust 200,000 jobs in January, and wages rose at the fastest pace in more than eight years, evidence of a healthy job market.
The pay gains suggest that employers are increasingly competing for a limited pool of workers. Raises stemming from Republican tax cuts and minimum wage increases in 18 states also likely boosted pay last month.
The unemployment rate remained 4.1 percent for a fourth straight month, the lowest level since 2000, the Labor Department said in its monthly jobs report Friday.
The figures point to an economy on strong footing even in its ninth year of expansion, fueled by global economic growth and steady consumer spending at home.
The pickup in hourly wages, along with a recent uptick in inflation, may make it more likely that the Federal Reserve will raise short-term interest rates more quickly in the coming months.
Most other recent economic data have also been encouraging. Factories, for example, expanded rapidly in January, according to a survey of purchasing managers, in part because a weaker U. S. dollar and solid growth overseas have boosted U. S. exports.
And many Americans appear confident enough to buy homes: Sales of existing houses reached their highest level in 11 years in 2017. At the same time, would-be buyers are struggling to find suitable homes because so few properties are available for sale. The demand for housing helped lift home building in 2017 to its fastest pace in a decade. Construction companies added 210,000 jobs last year, the most in two years.
With unemployment at a 17-year low, there are fewer job-seekers for businesses to hire. The thinner pool of applicants has slowed job gains the past two years. Most economists expect that trend to continue in 2018. But if wage growth picks up consistently, some Americans who have stopped looking for work the past few years might resume their job hunt. Their influx could boost hiring in coming months.
