U.S. hiring in January topped all forecasts while wage gains cooled and the government shutdown pushed up the unemployment rate, signaling job gains remain robust without major inflation pressures that would worry Federal Reserve officials.
Nonfarm payrolls increased by 304,000, the most in almost a year. The median estimate in a Bloomberg survey called for an increase of 165,000, following an initially reported 312,000 in December.
Average hourly earnings rose just 0.1 percent from the prior month, missing estimates and the smallest increase since late 2017. The annual gain of 3.2 percent matched forecasts though was down from an upwardly revised 3.3 percent in December.
The jobless rate increased to 4 percent, reflecting the shutdown, as the number of unemployed on temporary layoff rose by 175,000, many of them federal workers, according to the department.
While the job market looks healthy, it’ll be hard to match last year’s strength in employment, as the economy is projected to expand at a more moderate pace in 2019. The tax-cut tailwinds are likely to fade, the state of the trade war remains uncertain and global growth is cooling. In addition, businesses say the shortage of skilled workers is limiting plans to expand their workforce.
