U.S. Economy Added 304,000 Jobs in January; Unemployment at 4% - Khorgist.com


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Friday, 8 February 2019

U.S. Economy Added 304,000 Jobs in January; Unemployment at 4%

U.S. Economy Added 304,000 Jobs in January; Unemployment at 4%

The Labor Department released its monthly estimate of hiring, unemployment and wages for January on Friday morning. The report provided an important snapshot of the American economy.

304,000 jobs were added last month. Economists had expected a gain of about 172,000.

The unemployment rate rose to 4.0 percent, from 3.9 percent.

Average earnings rose 3 cents per hour in December, and were up 3.2 percent from a year earlier.

December’s job growth was revised sharply downward. The government now says employers added 222,000 jobs in the final month of the year, down from an earlier estimate of 312,000.
The Takeaway

The government shutdown may have hurt the economy, but there’s no sign it slowed down the United States’ record-setting job market.

January’s growth means that American employers have added jobs for 100 consecutive months, extending a record run. The unemployment rate is near a multidecade low, and wages — long a weak point — are rising.

The shutdown idled hundreds of thousands of federal workers for much of January, and left hundreds of thousands of others working without pay. Ripple effects hit everyone from unpaid government contractors to Washington lunch spots that lost business.

But the disruption doesn’t appear to have dissuaded private-sector employers from continuing their strong pace of hiring. And furloughed federal workers counted as employed for the purposes of government statistics.

Even before the lapse in funding, economists were growing nervous that the United States’ decade-long expansion could be nearing its end. The shutdown not only added to those fears, it also shuttered the Commerce Department, which produces a lot of the data forecasters rely on. (The Labor Department, which produces the jobs report, stayed open.)

The jobs report “could further confuse rather than clarify where we’re at, at a critical time when we could be at a tipping point,” said Diane Swonk, chief economist for the accounting firm Grant Thornton. “We don’t know. And the more we don’t know, the harder it is to make decisions.”
A Hidden Shutdown?

The monthlong shutdown put an $11 billion dent in the economy, according to the Congressional Budget Office. Some private estimates put the costs even higher.

That damage was hard to see clearly in Friday’s job figures, however. Federal workers will all receive back pay for the days the government was closed, whether or not they were required to work. As a result, the official figures counted all of them as having been on government payrolls in January, even if they weren’t actually on the job.

Government contractors generally won’t receive back pay, so if they didn’t work, they weren’t counted. Ditto for other private-sector workers who were laid off (or weren’t hired) because of the shutdown. But most economists expected those effects to be small in the context of an economy that employs more than 150 million people.

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