The past few months have gotten us accustomed to a breakneck pace of job growth. January’s employment report seemed modest by comparison, but still offered plenty to cheer about.
The US economy added 151,000 jobs in January, according to data released Friday by the Labor Department. Last month's gains came on the heels of an impressive 262,000 jobs added in December 2015 (that figure was revised downward). Economists had expected growth to slow to about 190,000 added jobs.
"The fact that payroll gains 'fell back to earth’ is not necessarily a bad sign," IHS Global Insight economist Nariman Behravesh writes in an e-mailed report. "That said, much of the deceleration was due to what are likely to be temporary factors,” like a slowdown in seasonal work from the holiday season.
The unemployment rate ticked down to 4.9 percent – its first time below 5 percent since February 2008 and just before the early stages of the Great Recession. Since 2010, the US has gained nearly 14 million new jobs.
January “marked slowing in the rate of job creation after the surge seen late last year,” MarkIt economist Chris Williamson wrote in an e-mail. “However, this is still a robust rate of employment growth, and a trend strong enough to keep bringing unemployment down. Furthermore, December’s numbers had in part reflected stronger than usual construction sector hiring due to unseasonably warm weather.”
The January report comes amid a wobbly start to the year for many areas of the economy, both domestically and abroad. American financial markets have been up and down, thanks to plunging oil prices and an economic slowdown in China, where GDP growth hit its slowest pace in seven years in January.
US stocks had their worst 10-day start to a calendar year in over a century. Despite a rally to close out the month, the Dow lost 5.5 percent of its value last month – its worst monthly performance since August 2015. The Nasdaq sank 8 percent, having its worst month since May 2010. The bumpy start made many investors worry that the Federal Reserve’s long-awaited hike of key interest rates back in December may have been premature.
The labor market, however, hasn’t flinched. Among the biggest bright spots of the January report, too, were wages, which grew 0.5 percent last month. It was the biggest monthly increase for wages since January 2015; overall, hourly earnings have gone up 2.5 percent in the past year. That suggests that so far, at least, any uncertainty in the investment markets hasn’t affected regular workers.
“That gain in average hourly earnings is significant,” Diane Swonk, an independent economist in Chicago, told the New York Times. “That’s not strong enough, but it’s a move in the right direction and that’s reassuring.”
January was the 71st month in a row that the economy added jobs, a streak that goes back nearly six years. “Although it has been an uneasy month for the financial markets, the more important measure is how Main Street is doing,” Michael Madowitz, an economist for the left-leaning Center for American Progress, wrote in an e-mailed statement. ”The overall data show an economy that is improving by many measures in spite of weaker corporate profits.”