A Friday Labor Department report finds U.S. nonfarm businesses added 143,000 new positions in January, falling short of estimates, but the new analysis also pegged the national unemployment rate at 4% to start the year, a decline from the previous month.
Job growth in January came in short of the 169,000 projected by Dow Jones and was also shy of 2024’s average monthly job gains of 166,000.
According to Friday’s Employment Situation Summary compiled by the Bureau of Labor Statistics, sectors showing the biggest growth in employment roles in January include health care, retail trades and government which added 44,000, 34,000 and 32,000 new positions, respectively, last month.
Average unemployment across the country edged down to 4% in January, down from December’s 4.1% rate. There were 6.8 million unemployed people in January, a number little changed from December, per the bureau’s report.
Utah’s unemployment rate clocked in at 3.5% in December, according to the most recent report from the state’s Department of Workforce Services. January’s unemployment figures for Utah will be released later this month.
The Bureau of Labor Statistics report also included revisions to previous data releases, including upward adjustments to job growth numbers from November and December last year. December’s new jobs figure was revised up to 307,000 positions and November’s jobs creation rate went up to 261,000. Revisions for the two months added a total of 100,000 jobs.
The bureau also revised data for the 12-month period ending in March 2024, reducing the jobs count by 589,000. A preliminary adjustment back in August 2024 had indicated the the 12-month adjustment was 818,000 fewer jobs.
The latest jobs data is likely to support the Federal Reserve’s current pause position on interest rate adjustments as it takes a wait-and-see approach ahead of potential economic impacts of new policies enacted by President Donald Trump.
“A lower-than-expected January payrolls number was more than offset by upward revisions to November and December’s totals and a downtick in the unemployment rate,” Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management, told CNBC. “Those who’d hoped for a soft report that would nudge the Fed back into rate-cutting mode didn’t get it.”
Will new tariffs roil the U.S. economy?
The first federal jobs report since Trump took office arrives just days after the president directed a series of new trade tariffs he says are aimed at curbing the flow of illegal drugs and illegal immigrants across U.S. borders.
On Saturday, Trump announced plans to impose 25% tariffs on goods from Mexico and Canada and 10% tariffs on goods imported from China. The plan also included a 10% tariff on energy resources from Canada. The trade actions were due to take effect on Tuesday.
But by Monday afternoon, both Mexico and Canada earned 30-day delays on tariff implementation after pledging to take actions aimed at reducing the flow of fentanyl across their borders into the United States. Mexican President Claudia Sheinbaum pledged to deploy 10,000 National Guard troops to bolster border security and Canadian Prime Minister Justin Trudeau committed to a $1.3 billion border plan and the appointment of a “fentanyl czar.”
The China tariffs went into effect as scheduled and the Asian economic powerhouse immediately hit back with its own new raft of tariffs on U.S. imports, targeting coal and liquified natural gas with a new 15% levy as well as 10% on U.S.-sourced crude oil, farm equipment and some automobile imports.
The Federal Reserve has avoided any direct weigh-ins on Trump’s policy directions but at its January meeting last week, Fed Chairman Jerome Powell said a wait-and-see position was appropriate for the moment, pointing to positive U.S. economic indicators including GDP growth in the 2% to 2.5% range, a jobs market and unemployment rate that’s held relatively stable over the past six months and inflation that continues to move, albeit erratically, toward the Fed’s 2% goal.
At a press conference following the conclusion of the Fed’s two-day meeting on Jan. 29, Powell fielded numerous questions about what impacts policy changes promised by Trump would have on the economy. But the Fed leader noted the body makes its policy decisions based on economic data and doesn’t postulate on the shifting winds of political dialogue.
“I think where the committee is is very much in the mode of waiting to see what policies are enacted,” Powell said. “We don’t know what will happen with tariffs, with immigration, with fiscal policy and with regulatory policy. We need to let those policies be articulated before we can even begin to make a plausible assessment of what their implications for the economy will be.”
Powell also noted that it’s familiar territory for the Fed to be watching for economic impacts following a federal leadership turnover and accompanying changes in policy direction.
“This is no different than any other set of policy changes at the beginning of a new administration,” Powell said.
International trade policy changes impact the U.S. economy in a variety of ways, including potentially driving up prices on consumer goods and impacting business operations, and particularly so for companies that rely on imported goods and components.
In a Deseret News interview earlier this week, World Trade Center Utah President/CEO Jonathan Freedman noted the widespread reliance Utah employers have with the flow of international trade. Mexico, Canada and China are among the top import/export trading partners of Utah-based companies.
“In Utah, 25% of the jobs rely in some way on international trade,” Freedman said. “That’s over 430,000 jobs, a significant amount that is critical for our economy.”