Job growth in the United States decelerated last month, yet the low unemployment rate underscored a stable albeit more restrained economy.
Employers increased payrolls by 143,000 in January, with the unemployment rate decreasing from 4.1% to 4%, as per the Labor Department report.
These figures come against the backdrop of President Donald Trump’s plan for significant changes, such as reducing government spending, cutting the federal workforce, deporting mass migrants, and imposing higher tariffs on various imported goods.
These proposals have cast uncertainty over the future path of the world's largest economy.
While the Federal Reserve opted not to decrease interest rates due to lingering uncertainties, including the impact of the proposed policy changes by the new administration, the Chairman Jerome Powell expressed decreased concerns about the job market.
Even with the recent dip in job growth, analysts remained unruffled, pointing out the upward revisions to job figures in November and December which were stronger than previously thought.
Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management, noted, “A lower-than-expected January payrolls number was more than offset by upward revisions to November and December's totals and a downtick in the unemployment rate."
Job gains in January were primarily driven by the health care and retail sectors, despite challenges posed by wildfires and winter storms.
Average hourly wages saw a 4.1% increase compared to January 2023, according to the report.
Although the report reflected fewer job gains in 2024 overall than initially estimated, it indicated a relatively stable job market. US stocks experienced minimal changes following the news.
In response, White House spokeswoman Karoline Leavitt emphasized that the report highlighted "the necessity of President Trump's pro-growth policies".
Samuel Tombs, chief US economist for Pantheon Macroeconomics, also noted the stability in the job market, indicating that despite some revisions, it was no longer anticipating rate cuts in March.
However, Tombs cautioned about a potential "relapse" in job growth given the current level of hiring indicators and uncertainties surrounding the new administration's economic policies.