U.S. employers created 200,000 new jobs in January, a modest increase over December and representing the 88th straight month of job growth.

Indeed, the current job expansion represents the longest on record, even though the pace of job growth slowed a bit over the last two years. While the American job market has significantly tightened, nonetheless the outlook remains quite positive.

The unemployment rate in January stayed at its near all-time low of 4.1%, as the number of longer-term unemployed continued to shrink.

Indeed, the January data confirm not only the tightness of the U.S. labor market but also that the tight market has begun to trigger higher increases in money wages.

Average hourly earnings rose 2.9% in January from a year earlier, the fastest rate of increase since the jobs recovery began.

With unemployment in the U.S. at such a low level, virtually all indicators still point to the strong job market getting even stronger.

Wage growth is accelerating, job openings are near a record high and employers are complaining about a shortage of skilled workers. Of course, all of this is consistent with the expectations that the Federal Reserve will provide another rate hike at its March meeting.