Job Growth Slows but Remains Healthy

Job growth slowed in January while remaining “solid” and “healthy,” analysts said Friday (Feb. 7).

The Bureau of Labor Statistics (BLS) said in a Friday press release that total nonfarm employment rose by 143,000 in January after seeing an average monthly increase of 166,000 in 2024.

The BLS also reported that January saw the unemployment rate edge down to 4%, after accounting for annual adjustments to population control, and average hourly earnings rise 0.5%. The number of unemployed people remained little changed at 6.8 million, while average hourly earnings were $35.87.

The slowdown in job growth shows that the labor market is “moderating yet healthy,” Bloomberg reported Friday. It also suggests that the labor market is fueling the economy without contributing to inflationary pressures, so further interest rate cuts are unlikely, the report said.

Reuters reported that the slowdown was greater than expected, as the economists it surveyed had forecast an addition of 170,000 jobs. With unemployment remaining at 4%, though, there’s not likely to be a cut in interest rates at least until June, the report said.

America’s Credit Unions Senior Economist Dawit Kebede said in a statement emailed to PYMNTS: “The January jobs report indicates that the labor market remains solid, despite annual revisions showing last year’s gains were lower than initially reported.”

The decline in the unemployment rate reported Friday and the stronger payroll gains seen over the last three months suggest “a resilient economic foundation” that should support loan growth and loan repayments, Kebede said in the statement.

The sectors that saw the largest numbers of job gains in January were health care, with 44,000; retail trade, with 34,000; government employment, with 32,000; and social assistance, with 22,000, according to the BLS press release.

A decline of 8,000 jobs was seen in the mining, quarrying, and oil and gas extraction industry, with all the job losses concentrated in support activities for mining, the release said.

Other major industries showed little change in employment in January, per the release.

This report comes days after the BLS said job openings slipped in December to about 7.6 million, a figure that was 556,000 lower than the previous month’s.