U.S. employment growth slowed more than expected in January, with nonfarm payrolls rising by 143,000, following revised increases of 307,000 in December and 261,000 in November. Despite this slowdown, the unemployment rate declined to 4.0%, which may allow the Federal Reserve to delay interest rate cuts until at least June.
Employment in restaurants and bars declined by 15,700, most likely due to the Los Angeles fires and cold weather, causing job growth to dip below its three-month average. The average workweek also fell slightly, to 34.1 hours from 34.2 in December.
The healthcare industry led employment growth, adding 44,000 positions, while retail had a 34,000-job boost. Social assistance created 22,000 jobs, while government employment increased by 32,000, including 9,000 federal government positions.
Other sectors, such as construction, manufacturing, and transportation, had no change, and the proportion of industries reporting growth fell from 57.2% in December to 55.0%. Economists pointed out that many new employment were in low-wage industries.
Despite the slowdown, the job market remains strong, with average hourly earnings up 0.5% and wages up 4.1% in the last year. The unemployment rate of 4.0%, the lowest since May, is not directly comparable to December's 4.1% figure due to changes in population restrictions.
