The latest monthly jobs report from the United States showed that the economy posted a steady pace of job growth during January. The data comes despite the U.S. government shutdown.
Data from the U.S. Labor Department showed that the economy added 304k jobs during January. The data marked the 100th consecutive month of job gains on a monthly basis which remains a new record.
The unemployment rate, however, ticked higher to 4.0%. Economists polled forecast that the unemployment rate would remain unchanged at 3.9%. The unemployment rate has been steadily rising higher over the past two months after touching a 49-year low at 3.7% last year.
The Labor Department said that the government shutdown attributed to the uptick in the unemployment rate. Some 300,000 government workers were furloughed during late December due to the partial government shutdown.
The December jobs report showed a net downward revision of 70,000 for November and December 2018.
Outside the government sector, private sector payrolls increased by 296,000 during the month. This marked an above average pace of added jobs. Hiring grew across almost all sectors. Construction firms added 52,000 jobs. Only the local and state government jobs lost 7000 jobs during January.
The average hourly earnings rose by 3.2% on a year over year basis. Wage growth continued to grow at the fastest pace since 2009.
However, on a month over month basis, the average hourly earnings dipped lower to rise just 0.1% on the month. This was below the estimate of a 0.3% increase.
The official payrolls report also saw a benchmark revision which saw the data for March 2018 revised down by 1000 jobs. Overall, for the year 2018, the U.S. economy added 2.674 million jobs which represent an upward revision from the previous estimates of 2.638 million.
The revisions went as far back as January 2014.
ADP/Moody’s shows private sector added 263k jobs
Earlier in the week, private payrolls data from ADP/Moody’s indicated that the U.S. economy added 213k jobs for January. This was higher than the forecasts of 183k jobs.
Revisions for December showed a downside revision to 263k jobs.
Most of the gains in the private sector showed an increase of 63,000 jobs from the small business sector while mid-sized businesses added 84,000 jobs. Large companies with over 500 employees added 66,000 jobs.
On a sector basis, most of the hiring came from the goods-producing sector, which added 69,000 jobs. The construction sector added 35,000 jobs while manufacturing industry added 33,000 jobs. The natural resources and mining sector downsized by 1000 jobs during January.
The ADP report showed that the labor market was seen weathering the government shutdown quite well despite the disruptions to businesses, payrolls were seen rising at a steady pace.
The labor market continues to remain one of the critical cornerstones of the U.S. economy despite the prospects of a slowdown in the coming months.
The Federal Reserve held its monetary policy meeting earlier last week, and interest rates did not change. The Fed signaled that it would remain patient in hiking interest rates and noted that the U.S. economy would regain the momentum in the second quarter of the year.
The week ahead will see the first advanced GDP report for the third quarter coming out. Growth should slow down to a pace of 2.6% during the period.