Economy Adds 300,000 Jobs in January Despite Shutdown, Defying Expectations


That's less than the blockbuster 312,000 first reported and followed the revised 176,000 jobs added in November.

The manufacturing sector added 13,000 jobs in January, making its 12-month total 261,000. The unemployment rate rose to 4 percent, its highest level since June, which the Labor Department attributed to the impact of the shutdown. Still, hiring has accelerated since last summer, a development that has surprised economists because hiring typically slows when unemployment is so low.

"The overwhelming conclusion from today's numbers is that the US labor market remained incredibly strong at the start of 2019", said Leslie Preston, senior economist at TD Economics.

But Chamberlain cautioned that many federal workers were also looking for full-time work during the shutdown, and the number of people applying for federal jobs dropped 45 percent on Glassdoor. The ability of many of them to do so is itself a sign of the job market's strength, Swonk said. "U.S. companies have not let up one bit on their hiring in response to risks out there in the world economy".

In retail trade, employment ticked higher by 21,000, with growth in sporting goods as well as miscellaneous store and non-store retailers.

Some of the best forecasters in the country had predicted job gains of about 170,000, a substantially lower figure.

Yet strong hiring should boost household incomes, fueling more consumer spending, which would help drive economic growth.

In January, average hourly earnings for all private-sector workers rose by 3 cents, or 0.1 percent, to 27.56 USA dollars, following a 10-cent gain in December. The unemployment rate rose slightly to 4%. They are counted as employed because they will receive back pay for the period.

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"They've enjoyed two decades of minimal pay growth in general", she said.

"We expect the labor market to gradually cool in 2019 but the combination of solid payroll gains, rising wages and falling unemployment rate will continue", Oxford Economics said in a client note.

An analyst at the U.S. investment bank Charles Schwab, Kully Samra, stated: "A tight labour market and healthy wage growth support economic growth, and today's data should buoy consumer spending and could boost the stock market".

Fed Chairman Jerome Powell this week cited the weaker global economy as a key reason why the central bank will be "patient" before it raises its benchmark interest rate again. That left the annual increase in wages at 3.2 percent.

The largest increase in jobs last month was seen in the leisure and hospitality industry, which gained 74,000 jobs.

During the recent government shutdown, economists thought that hundreds of thousands of federal workers placed on furlough for more than a month may artificially impact the jobs numbers.

During the shutdown, stories emerged of government workers driving for ride-sharing services and working odds jobs as a way to make ends meet during the month they went without a paycheck.