Alexandria, Virginia – The Bureau of Labor Statistics reported on Friday that job creation fell short of expectations in January. Nonfarm payrolls increased by 143,000 for the month, a decrease from the revised 307,000 in December. This number also missed the Dow Jones forecast of 169,000. The unemployment rate did dip slightly to 4%. The report also included significant revisions to the 2024 job total, revealing a notable downward adjustment to the previous payrolls level.
According to the BLS’s annual revisions, the jobs count was lowered by 589,000 in the 12 months leading up to March 2024. This adjustment was a substantial decrease from the preliminary adjustment made in August 2024, which had indicated 818,000 fewer jobs. The household survey reported a surge of 2.23 million individuals at work, a result of adjustments made for population and immigration in the country.
Job growth in January was most notable in health care (44,000), retail (34,000), and government (32,000) sectors. However, social assistance saw an increase of 22,000 jobs while mining-related industries lost 8,000. The unemployment rate decreased as labor force participation rose to 62.6%, marking a 0.1 percentage point increase from December. The broader measure, including discouraged workers and those with part-time jobs for economic reasons, remained steady at 7.5%.
Despite concerns that the California wildfires may impact job numbers, the bureau stated that there was no discernible effect on the total reported. This latest report comes as President Donald Trump began his tenure in office in January, focusing on tax cuts, economic growth, and trade policies. Federal Reserve officials are closely monitoring the job numbers as they weigh future monetary policy decisions.
In the markets, stock market futures remained positive and Treasury yields were higher following the report. While the Fed had previously cut its benchmark rate by a full percentage point in late 2024, recent statements from policymakers suggest a more cautious approach going forward as they assess the implications of their policies.