File: Hiring signage displayed at a job and resource fair hosted by the Mountain Area Workforce Development Board in partnership with NCWorks in Hendersonville, North Carolina, US, on Tuesday, Nov. 19, 2024. (Allison Joyce/Bloomberg via Getty Images)
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WASHINGTON – The U.S. economy added jobs at a slower pace than expected in January, as the Federal Reserve remains in a holding pattern for interest rate cuts as it evaluates the labor market and inflation data.
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The Labor Department on Friday reported that employers added 143,000 jobs in January, below the estimate from LSEG economists.
The unemployment rate came in at 4%, coming in lower than economists’ expectations.
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The number of jobs added in the prior two months were both revised, with job creation in November revised up by 49,000 from a gain of 212,000 to 261,000; while December was revised up by 51,000 from a gain of 256,000 to 307,000. Taken together, 100,000 more jobs were created in those two months than previously reported.
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Private sector payrolls added 111,000 jobs in January, below the 141,000 estimated by LSEG economists.
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Wage growth was stronger than expected, with average earnings growing by 0.5% from the prior month and 4.1% from a year ago. Those both top the LSEG economists’ estimates of 0.3% growth on a monthly basis and 3.8% year over year.
The manufacturing sector saw employment rise by a modest 3,000 jobs in January, which came in above economists’ expectations that the sector would shed 2,000 jobs for the month.
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Health care added 44,000 jobs in January, driven by hiring at hospitals (+14,000), nursing and residential care facilities (+13,000) and home healthcare services (+11,000). The sector was below its 2024 average of 57,000 jobs per month.
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Retail added 34,000 jobs last month with notable gains at general merchandise retailers (+31,000) and furniture and home furnishings retailers (+5,000), while electronics and appliance retailers saw a decline (-7,000). Overall, the retail sector had little net employment change in 2024.
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Government added 32,000 jobs in January – a figure that was close to in line with its average monthly gain of 38,000 in 2024.
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Social assistance added 22,000 jobs, led by individual and family services (+20,000) with gains also occurring in community food and housing, emergency and other relief services (+4,000). The sector grew by an average of 20,000 jobs a month last year.
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The mining, quarrying and oil and gas extraction industry lost 8,000 jobs in January, with losses concentrated in mining support activities. The sector experienced little net change in 2024.
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The labor force participation rate was unchanged at 62.6% after accounting for the annual adjustments to population controls made by the Bureau of Labor Statistics (BLS).
The number of people considered to be long-term unemployed, defined as being jobless for 27 weeks or more, was little changed in January at 1.4 million. The long-term unemployed accounted for 21.1% of all unemployed people.
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The number of workers employed part-time for economic reasons was little changed at 4.5 million. These workers would’ve preferred full-time work but were working part-time because their hours were reduced, or they couldn’t find full-time jobs.
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Multiple jobholders increased by 286,000 in January and represented 5.3% of the overall labor force, a level that has changed little over the last year.
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