Job growth in January was strikingly robust, the government reported Friday, suggesting the 35-day government shutdown did little to slow economic growth and giving an unexpected lift to a besieged President Donald Trump.
The economy added 304,000 jobs in January, the Bureau of Labor Statistics reported, up from a revised estimate of 222,000 in December. Average hourly private-sector earnings were up 3.2 percent over the previous year, strengthening the case that the accelerated wage growth observed in recent months was no mere blip.
Story Continued Below
Unemployment rose slightly to 4 percent, up from 3.9 percent in December. Analysts cautioned that the number may be slightly inflated, since furloughed federal employees were counted as unemployed in the Census’ household survey, despite being counted as employed in the BLS’ overall jobs numbers.
The numbers show that economic growth remained brisk at the start of 2019, despite a trade war with China and the longest government shutdown in U.S. history.
“At least through the prism of the job market, it does not appear to have had a significant effect,” said Mark Zandi, chief economist at Moody’s Analytics.
The numbers confounded economists’ expectations and provided some badly needed good news to President Donald Trump, who suffered deflated poll numbers after the shutdown. The jobs report allows Trump to claim victory in the economy despite evidence of growing dysfunction in Washington.
“January’s #JobsReport demonstrated the strength of the American economy … as private sector job creation continued to surge despite the partial government shutdown,“ Labor Secretary Alexander Acosta tweeted.
The Dow Jones Industrial Average rose nearly 200 points in early trading Friday in response to the report.
“Who is calling for a recession this year again?“ said Chris Rupkey, chief economist at MUFG Union Bank, in an email. “Whoever it is, you can forget about it after a picture-perfect jobs report to start the year off right.“
The uptick in hiring was paired with an unusually large revision to the December numbers, from 312,000 to 222,000.
The January increase may also be inflated by furloughed government contractors forced into part-time work during the shutdown — the number of so-called involuntary, part-time workers grew by half a million.
“Half a million is an astounding number for one month,“ said Diane Swonk, chief economist at Grant Thornton. “It’s an important caveat.“
There are signals elsewhere, though, that Trump’s self-created crises are beginning to gnaw at the economy, analysts said. Possibly as a result of the president’s trade policies and the shutdown, consumer confidence in January fell to its lowest point in a year and a half.
“It’s not helpful to have, essentially, nails on the highway when you’re at risk of getting a flat tire,” said Mark Hamrick, senior economic analyst at Bankrate.com. “And the government shutdown is those nails.”
U.S. and Chinese trade officials met in Washington over the past two days in an effort to negotiate an end to the $360 billion tariff war before a March 1 deadline.
“We have tariffs on half of all the imports into the U.S.,” said Dan North, chief economist at Euler Hermes North America. “It’s absolutely putting a slowdown on China.”
The Fed’s Wednesday decision not to raise interest rates sent markets soaring. “Tremendous news!” Trump tweeted — though perhaps not tremendous enough to prop up his sagging poll numbers. A POLITICO/Morning Consult survey this week showed Trump’s disapproval rating at 55 percent, with an equal percentage of voters blaming Trump and Republicans for the shutdown. A NBC/Wall Street Journal poll showed Trump’s disapproval rating slightly lower at 54 percent, about the same as before the shutdown.