Published: Sun, February 03, 2019
Business | By Eloise Houston

US job gains largest in 11 months; unemployment rate rises

US job gains largest in 11 months; unemployment rate rises

Those workers were counted as employed, the Bureau of Labor Statistics said.

The jobs report also showed revisions for December's high job growth, changing the number of jobs added down to 222,000 from 312,000. Nevertheless, the final January data should continue to reflect a healthy labor market.

During the recent government shutdown, economists thought that hundreds of thousands of federal workers placed on furlough for more than a month may artificially impact the jobs numbers.

While the data reflected 175,000 people who identified themselves as temporarily laid off, the amount of long-term unemployed remained steady at 1.3 million.

But outside of those ripple effects of the shutdown, the jobs number alleviate anxiety that the private sector will begin to act on concerns of an economic slowdown, particularly after the Federal Reserve raised federal interest rates in December and eyes future hikes.

The labor force participation rate was 63.2%, and the employment-population ratio came in at 60.7%. It's the second month the unemployment rate has increased, but economists say it's for the right reason: More people are coming off the sidelines and looking for work.

Restaurants added almost 37,000 jobs in January, according to newly released federal data, as the industry shrugs off labor-cost fears to continue its long-term expansion. Fed officials are finally taking note of this important trend. The underemployment rate, a broader measure of labor market slack, jumped to 8.1% from 7.6%.

Yet with unemployment so low and many companies struggling to fill jobs, layoffs might not have been widespread.

Employment in leisure and hospitality grew by 74,000 jobs for the month, with restaurants and bars adding 32,000, while construction added 52,000 workers and hospitals and ambulatory care centers together added about 41,000 net new positions. Job creation has been a particularly strong suit for the economy. Manufacturing payrolls increased by only 13,000 in January, reflecting the more downbeat sentiment in an array of industrial sectors that are vulnerable to slower global growth. Builders added 52,000 jobs, the most in almost a year. Retail employment, which has been essentially flat over the past year, rebounded by 20,800 jobs, while professional and business services employment increased by 30,000 jobs last month. In January 2018, healthcare added 23,700 jobs.

Aggregate hours worked increased by 0.3% m/m, indicating that activity continued to proceed at a solid pace. The unemployment rate ticked up to 4.0 percent, the government said Friday.

US economic growth is slowing from its rapid 2018 pace, but the continued robust gains in employment may cause pause to commentators that have been calling for recession.

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