Job growth in January shattered expectations, with nonfarm payrolls surging by 304,000 despite a partial government shutdown that was the longest in history, the Labor Department reported Friday.
The unemployment rate ticked higher to 4 percent, a level where it had last been in June, a likely effect of the shutdown, according to the department. However, officials said federal workers generally were counted as employed during the period because they received pay during the survey week of Jan. 12. On balance, federal government employment actually rose by 1,000.
Economists surveyed by Dow Jones had expected payrolls to rise by 170,000 and the unemployment rate to hold steady at 3.9 percent.
In all, it was a powerful performance at a time when economists increasingly have said they expect growth to slow in 2019. January marked 100 months in a row of positive job creation, by far the longest streak on record.
Stock futures and Treasury yields jumped in response to the better-than-expected report.
The news was not all good, though, as data revisions pushed previous numbers lower.
December’s big initially reported gain of 312,000 was knocked all the way down to 222,000, while November’s rose from 176,000 to 196,000. On net, that took the two months down by 70,000, bringing the three-month average to 241,000. That’s still well above the trend that would be common this far into an economic expansion dating back 9½ years.
For the full year of 2018, the average monthly gain was 223,000.
“Certainly, the economy has slowed, and that will undoubtedly be apparent in other data in the coming weeks. Still, the jobs market remains a bright spot,” Jim Baird, chief investment officer for Plante Moran Financial Advisors, said in a note. “Employers are still hiring at a strong pace. That’s good news for the consumer sector, and ultimately good news for the economy.”
A separate measure of unemployment that takes into account discouraged workers and those holding part-time positions for economic reasons jumped to 8.1 percent from 7.6 percent, with the January reading being around where it was in January 2018.
Among individual groups, the unemployment rate for Hispanics jumped to 4.9 percent from 4.4 percent in December. The rate for African-Americans rose to 6.8 percent from 6.6 percent while Asians saw a decline to 3.1 percent from 3.3 percent. The rate for whites was 3.5 percent, a notch higher than December’s 3.4 percent.
James E Windsor, Overpasses News Desk
February 1st, 2019