The first jobs report under the new Trump administration has come in weaker than expected.
The US economy added 143,000 jobs in January, which was far fewer than the 169,000 forecast by economists.
It was the weakest start to a year for overall jobs growth since before the Covid-19 pandemic, but there was a silver lining.
The unemployment rate fell slightly to 4 percent from 4.1 percent in December.
Investors had expected it to hold unchanged.
Following an unexpected increase in hiring in December, new revised figures released on Friday showed that the economy had added 307,000 jobs in December, exceeding the initial estimate of 256,000.
While this indicated strength in the economy, it also sent the stock market tumbling over fears that inflation is proving sticky.
This report, issued on Friday, marks the first jobs count since President Trump assumed office on January 20. Trump’s presidency brought in plans to enhance growth, reduce taxes, and implement significant tariffs on key trade partners.
Economists were anticipating a growth of 169,000 non-farm payrolls from December to January. However, the total count was expected to be impacted by the detrimental Los Angeles wildfires and severe cold weather experienced across various parts of the US.
In fact, the Bureau of Labor statistics said these factors ‘had no discernible effect on the count.’
The health of the labor market is a key consideration for the Federal Reserve, and investors will now be looking to the report for signs as to what move the central bank may make at its next meeting in March.
‘Stocks fell in January on the back of a strong jobs report, but today’s labor report appears more mixed,’ said eToro US Investment Analyst Bret Kenwell.
‘On the plus side, the unemployment rate inched lower to 4 percent and last month’s print was revised even higher.
‘However, this month’s headline jobs figure missed expectations, while average hourly earnings came in ahead of economists’ estimates.’
Strong wage growth is good for workers and should be viewed as a positive for consumer spending.
But Wall Street has watched this gauge closely over the last few years, Kenwell added, as investors worry that too strong of wage growth could push inflation higher.
The US economy added 143,000 jobs in January, which was far fewer than the 169,000 forecast by economists
Friday’s report is the first jobs count since President Trump took office on January 20
Julia Pollak, ZipRecruiter Chief Economist, said that the weaker than expected report defied ‘expectations of stabilization’ for the labor market.
‘Looking ahead, the labor market remains on uncertain footing. A stronger consumer is keeping parts of the economy afloat, but high interest rates continue to drag on investment and production,’ she said.
The majority of job growth for January was concentrated in health care, which added 44,000 roles, and retail, which added 34,000 roles.
Government also added 32,000 jobs in January.
It comes as Trump and Elon Musk’s Department of Government Efficiency (DOGE) are trying to cut down the federal workforce as part of their directive to save $2 trillion in federal spending.
Federal workers have been offered to take Trump up on a ‘buyout’ deal, which gives workers the option to resign from their current position but remain on the payroll with all benefits until September 30.
So far, around 40,000 workers have accepted the offer, which has been extended until Monday.
The stock market had a fairly muted response to the report on Friday, with the S&P 500 up around 0.1 percent, while the Nasdaq was up around 0.3 percent.
