January Brought Big Payroll Gains, Government Shutdown or Not

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Food services and drinking places added 36,600 jobs in January, according to the U.S. Bureau of Labor Statistics, and now employ more than 12.1 million people-up by more than 280,000 over the past 12 months. The unemployment rate rose in January (up from 3.9 percent in December), and that's largely because of the shutdown. The two astonishing numbers were the top-line jobs number - 312,000 new jobs - and the 11 cent rise in average hourly earnings. Participation rate is the highest it's been since 2013, and job gains were increasing pretty broad based across a lot of different categories, this jobs report is very, very solid.

Wage growth held steady in January.

The healthy gain the government reported Friday illustrated the job market's resilience almost a decade into the economic expansion. The report came two days after the Fed signaled its three-year interest rate hike campaign might be ending because of rising headwinds to the economy, including financial market volatility and softening global growth. That's just below the annual gain of 3.3 percent in December, which matched October and November for the fastest increase since April 2009.

It's worth noting that, by the end of January, weekly jobless claims had popped to their highest level since September 2017, although unemployment claims trickled to a 49-year low. But because these workers will eventually receive back pay, they were counted as employed in the survey of businesses that produces the monthly job gain. Job growth around 120,000 is more than enough to keep the unemployment rate under 4%.

Clouds have been gathering over the economic expansion, now in its ninth year and the second longest on record, with business and consumer confidence deteriorating in recent months.

Another possible ripple effect from the shutdown: The number of people working part time for economic reasons jumped by about 500,000, after many months of declining. "Nearly all of this increase occurred in the private sector and may reflect the impact of the partial federal government shutdown", it said.

The report is a key piece of data in gauging the direction of the U.S. Economy.

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Job growth picked up for the 100th consecutive month in January even as hundreds of thousands of federal workers were furloughed during the partial government shutdown. Interestingly, there was a dramatic spike in the number of Americans working part-time jobs in January.

Construction employment rose by 52,000.

Employment gains were led by the leisure and hospitality sector, which has added 410,000 jobs over the past year.

And for most of January, the weather was relatively warm in much of the United States, which likely boosted construction employment.

And manufacturing rose by 13,000.

Meanwhile, the increase in unemployment also was the result of more workers coming off the sidelines to join the job hunt. Retail payrolls rebounded by 20,800 jobs.

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