This could be attributable to a smaller supply of workers willing to take these jobs. The employment diffusion indexes, which show the percentage of industries that intend to add workers, mostly moved in a positive direction in January. The 3-month manufacturing index moved about 50 percent for the first time since March of 1998. It had fallen to 30.2 percent in April of 1999. The January employment report shows a very strong picture of the labor market.
Growth is widespread across sectors.
The only sector that seems to have been much affected by higher interest rates is mortgage banking, which has lost 21,000 jobs since June. Otherwise, the economy remains quite strong. At the same time, wage growth remains very modest, indicating that the strong labor market is not leading to wage driven inflation.