Anderson Economic Group Work

January: Cristina Benton’s monthly commentary on the employment report

In the latest employment report, the unemployment rate ticked upward 0.1 percentage points to 4.0 percent in January. Despite the 35-day government shutdown, most federal employees were counted as employed during the period due to receiving pay during the January 12th survey week.

The Latino unemployment rate edged up to 4.9 percent in January, while the unemployment rate among Black or African American individuals increased to 6.8 percent. White unemployment rose to 3.5 percent. Meanwhile, the only unemployment rate to decrease over the last month was Asian unemployment, which fell 0.2 percentage points to 3.1 percent.

Total nonfarm payroll employment beat expectations, growing by 304,000 in January, marking the fastest growth since February 2018. A Dow Jones survey of economist had expected an increase of 172,000 jobs. Nearly 60% of job gains were concentrated in Leisure and Hospitality (+0.4%), Education and Health Services (+0.2%), and Construction (+0.7%). Average hourly earnings of private employees increased by 3 cents, or 0.2%, marking the 16th month of consecutive increases in the measure; average hourly earnings have increased 4.1% since October 2017.

It is hard to predict what will happen in the coming months in terms of employment and jobs. Murmurs of a possible U.S. recession coming in the next year or two can be heard amongst economists, even while job growth continues to be strong.  Italy has slipped into a recession, marking part of a broader slowdown of the economy of Europe. Meanwhile, the threat of the U.S. trade war with China still looms while China’s economy continues to decelerate rapidly. In response to worries of a global slowdown, the Federal Reserve has signaled an end to interest rate increases, although they note that economic growth in the U.S. remains “solid” for the time being.