The Department of Labor reported that the US economy added 143,000 jobs in January, falling short of economist expectations of 168,000. The unemployment rate remained flat at 4%, down slightly from 4.1% the previous month. The report was released on Friday as the economy operated under a new presidential administration.
Revisions to prior months showed stronger hiring than initially reported, with November employment figures rising to 261,000 from 212,000 and December climbing to 307,000 from 256,000. However, cumulative job growth estimates for 2023 and early 2024 were reduced significantly, with 589,000 fewer positions added than previously estimated across that period.
The labor market has cooled considerably from its peak in 2022. Job openings declined by 1.3 million from 2024 to the previous year, and workers are changing positions less frequently. The Federal Reserve responded by reducing interest rates three times in the fall as inflation began moderating, though officials held rates steady at their most recent meeting in January. Current rates stand in a range of 4.25% to 4.5%, down one percentage point from a year prior. Inflation has stabilized above 2.5% in recent months, having declined from a 9.1% peak in 2022.
The administration cited the revised employment data as evidence of economic weakness during the previous period and promoted its policy agenda accordingly. Meanwhile, attention has shifted to potential economic impacts from new trade policies. A 10% tariff on Chinese imports took effect on 1 February, with 25% tariffs on Canadian and Mexican goods scheduled for 1 March following a negotiated delay. Economists have expressed concern about the effects of tariffs on businesses dependent on imports from these major trading partners, though the administration has indicated it views the approach as necessary despite potential short-term costs.
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