143,000 Jobs Added in January, Unemployment Rate Edges Down

(Image courtesy of the Bureau of Labor Statistics; Breakout image courtesy of Wendy Wei/pexels.com)

There were 143,000 jobs added to total nonfarm payroll employment in January, the Bureau of Labor Statistics reported Feb. 7.

And, the unemployment rate edged down to 4%.

Job gains occurred in health care, retail trade and social assistance. Jobs declined in mining, quarrying and the oil and gas extraction industry.

The change in total nonfarm payroll employment for November was revised up by 49,000, from 212,000 to 261,000. The change for December was revised up by 51,000, from 256,000 to 307,000.

“At first glance, on net, these data indicate a job market that remains reasonably strong. Job growth over the past three months has averaged a gain of 237,000, likely above what can be sustained this year,” said MBA SVP and Chief Economist Mike Fratantoni.

“However, there are several factors working to cloud this picture. First, there were substantial revisions to prior payroll data, with job growth from the most recent months revised higher, but the annual benchmark process showing slower job growth for 2024. Second, the household survey was adjusted in January to recognize the impact of substantial international immigration in recent years, adding 2.9 million people to the population count as of January, which is one factor pushing the unemployment rate down,” Fratantoni continued. “Finally, the wildfires in Los Angeles and severe winter weather events across the country, while not clearly impacting the results according to BLS, are another source of uncertainty.”

How will the latest numbers affect rates?

“January’s mixed report reinforces the Federal Reserve’s cautious approach as 2025 gets underway,” said First American Senior Economist Sam Williamson. “The Fed has emphasized the need for either ‘real’ inflation progress or ‘some’ labor market weakness before delivering additional rate cuts and the January jobs report provided neither, likely keeping rate cuts off the table until May/June at the earliest.”

“With all the caveats, these job market data are likely to keep the Fed on hold with respect to any further rate cuts,” Fratantoni said. “With inflation still above target, and no appreciable signs of weakening in the job market, MBA’s forecast is that the Fed will make at most one more cut this cycle.”