The jobs report’s main message was that labour market tightness continued to persist in January. Non-farm payrolls rose 304,000, while unemployment rate slightly ticked up, by 0.1 ppt to 4%, as labour force participation rate rose to 63.2% – the highest reading since August 2013. As a result of the tight labour market conditions, nominal wage growth hit 3.5% YoY.
Although the unemployment rate rose to 4%, counter intuitively, its good news. It is a sign that the labour market has been improving in a more broad-based manner than before: previously inactive people (i.e. unemployed people, who were not officially registered as job searchers) re-joined the market and are actively seeking employment.