In January, the U.S. economy experienced a slowdown in job creation, adding only 143,000 nonfarm payroll jobs. This figure, reported by the Bureau of Labor Statistics (BLS), fell short of expectations and was below the 2024 average of 166,000 per month. However, the unemployment rate showed a positive shift, dropping to 4%. The first jobs report since President Donald Trump took office on January 20 showed a mixed picture of the labor market's health.
Despite the weaker-than-expected job growth, markets reacted with little enthusiasm. Stock market futures displayed a modestly positive trend, while Treasury yields saw an increase. The labor force participation rate showed a slight improvement, rising to 62.6%, a 0.1 percentage point increase from December. The BLS clarified that the devastating California wildfires had no discernible effect on the month's job count.
Job growth in January was primarily concentrated in health care, retail, and government sectors. Social assistance contributed significantly, adding 22,000 jobs. However, mining-related industries faced challenges, losing 8,000 positions during the same period. The number of individuals reporting to work surged by 2.23 million, reflecting a complex employment landscape.
In response to broader economic conditions, the Federal Reserve opted to cut its benchmark rate by a full percentage point in the latter part of 2024. As policymakers continue to navigate economic uncertainties, this move underscores efforts to bolster economic stability and growth.