Published: Sun, February 03, 2019
Markets | By Otis Pena

The US economy added 304,000 jobs in January, a surprisingly strong month

The US economy added 304,000 jobs in January, a surprisingly strong month

If they were, the Bureau of Labor Statistics said the unemployment rate for the month of January would have been higher.

The jobs market continues to be strong.

Wage gains, however, slowed, pointing to tame inflation. Falling confidence can cause consumers to restrain their spending, though economists note that confidence typically returns quickly after shutdowns end. One of them is the payroll survey, which measures hiring. Following revisions, job gains have averaged 241,000 per month since November.

Professional and business services rose by 30,000.

January was the 100th straight month of job gains.

These numbers beat expectations, with Bloomberg economists predicting 165,000 jobs would be added for the month of January. That's a key reason why the unemployment rate rose despite the healthy job gain. This lifted the unemployment rate one-tenth of a percentage point from 3.9 percent in December.

The partial government shutdown could have affected numbers, however.

Data from the employment site Glassdoor shows that the number of job postings rose almost 9 percent in late January compared with a year earlier, suggesting that demand for labor remained strong. That lowered the annual increase in wages to 3.2 percent from 3.3 percent in December, giving the employment report a Goldilocks feel. Stocks on Wall Street rose, while U.S. Treasury prices fell. The U.S. central bank removed language from its December policy statement that risks to the outlook were "roughly balanced".

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The workers who took part-time jobs during the shutdown likely have given them up, so that number should fall in next month's jobs report.

The shutdown also drove about a half million people into part-time work, swelling this group to 5.1 million, its highest level in 16 months.

It was boosted by a 500,000 increase in the number of people working part time, likely because of the government shutdown.

The unemployment rate inched up to 4 percent, and the shutdown contributed to the uptick, the department said.

He stated: "It's also possible that today's strong data will be among the last extremely strong employment reports".

Other data on Friday showed factory activity rebounding in January, with new orders rising strongly.

The current economic recovery is now only five months away from becoming the longest expansion ever, a record set in the 1990s, when the economy went 120 months in between recessions, as defined by the National Bureau of Economic Research.

But the US economy is still facing the reduced impact of tax cuts and weakening growth in China and Europe.

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