The much anticipated Unemployment Report for January was released last Friday and we were presented with a few surprises. Not any major surprises, but slightly unexpected nonetheless. Coming off of three straight quarters of decent GDP news, especially Q3’s 5.00% growth rate, job creation for the257,000 new jobs created in January first month of the new year needed to show continued growth in the non-farm payroll sector as well as gains in wages. What we got was a little of both.

 According to the U.S. Department of Labor, the unemployment rate for January increased slightly from 5.6% to 5.7%. While this headline number showed a higher percentage of those out of work compared to December, in reality the increase was due to the number of those eligible to work looking for employment. The labor participation rate has disappointed investors for several months yet there was a light uptick, as the Department of Labor also reported 62.9 percent of eligible workers looked for work, up barely from 62.7 percent. More people looking for work as a percentage of the total available work force is a positive sign.

Job creation was also a positive, with 257,000 new non-farm payroll jobs created for the month of January, this compared to 234,000 anticipated. The economy continues to provide 200,000+ job additions for eleven straight months, the longest such stretch in more than 20 years. Yet what investors may have paid the most attention to was the increase in wages. Wages increased a full .12 cents per hour which is the largest one month gain in nearly eight years, a year over year bump by 2.2 percent. Initially, the Dow soared getting very close to 18,000 yet toward the end of the day, it appeared a round of profit taking took hold and earlier gains were lost. Mortgage bonds also fell back upon the release of the report yet was on a see-saw track throughout the day. Many mortgage lenders changed their rates three times during the course of the day.

The stronger than expected numbers, especially the increase in wages could point to higher rates sooner rather than later, yet barring any statements by Fed Board members prior to the next round of FOMC meetings, it’s possible we’ll be in a holding pattern as it relates to interest rates.