Thank you President Trump, for showing us how it’s done.
The economy added 304,000 jobs in January, the Labor Department reported on Friday, well above the 165,000 economists had anticipated. It marks 100 consecutive months of job growth, which began in the middle of President Obama’s first term following the Great Recession.
The report comes despite a five-week shutdown that lasted most of the month, It dramatically revised downward the stellar December jobs report, which was revised down to 222,000 from the original 312,000 estimate.
The unemployment rate ticked up to 4 percent from 3.9 percent, even as figures on labor participation remained steady.
The Labor Department had said earlier it would consider the 800,000 federal workers who were furloughed or working without pay during the shutdown fully employed. But in Friday’s jobs report, it said that the shutdown had contributed to the uptick in unemployment.
Temporary layoffs increased 175,000 as a result of the shutdown, the department said Friday, a figure that included some furloughed workers. All in all, the number of unemployed workers rose to 6.5 million in the survey.
“Federal workers, many of them veterans, saw their financial security shaken, their credit ratings harmed, and their lives upended by the longest shutdown in history. And now, with families still hurting, President Trump refuses to take a second senseless shutdown off the table,” House Speaker Nancy Pelosi (D-Calif.) said of the report, while applauding the overall jobs figure.
The shutdown also may have increased the number of people who took on part-time work for economic reasons, which increased by about half a million to 5.1 million in January.
But the establishment side of the data seemed to shrug off the shutdown altogether.
“There were no discernible impacts of the partial federal government shutdown on the estimates of employment, hours, and earnings from the establishment survey,” the Labor Department said.
Wages rose 3 cents, well below their 10 cent rise in December. All in all, average hourly earnings were up 85 cents in the past year, a 3.2 percent increase. The wage increase coincides with 19 states adding implementing new minimum wage laws.
The White House trumpeted the numbers, saying that they provided “further evidence that show wages are growing, business optimism is strong, and the economy is thriving.”
The strong figures seemed to indicate that growth could continue and be robust.
“Overall, the January employment report continues to show that the job market remains robust in the United States. Rapidly rising job gains coupled with accelerating earnings suggest that households will continue to have the wherewithal to spend at a solid pace – keeping underlying economic growth at an above-trend pace,” said Nationwide chief economist David Berson.
The Congressional Budget Office estimated that economic growth would drop from 3.1 percent last year to 2.3 percent this year as the stimulus of the GOP tax cuts wore off.
The report could make a case for more interest rate increases this year, even after Federal Reserve Chairman Jerome Powell lowered expectations for more increases in the coming year.
“This report is supportive of Fed rate hikes despite the Fed itself taking a dovish tilt,” said Lendingtree Chief Economist Tendayi Kapfidze. “The Feds dual mandate relates to the labor market and inflation. This report confirms the continued strength in the labor market. If wage gains result in higher overall inflation then Fed could find itself needing to raise rates later in the year.”
The figures could also be a boon to financial markets, which had their strongest January in 30 years after suffering the worst December since the Great Depression.
The Dow Jones Industrial climbed 150 points in morning trading.