U.S. Job Market Shows Steady Growth in January, Unemployment Edges Down

The U.S. labor market maintained its momentum in January, with employers adding 143,000 jobs while the unemployment rate decreased slightly to 4.0 percent, according to data released by the U.S. Bureau of Labor Statistics.

The January job gains, while modest compared to December's revised figure of 307,000, signal continued stability in the labor market. Notable growth occurred in several key sectors, with health care leading the way by adding 44,000 jobs. Hospitals gained 14,000 positions, while nursing and residential care facilities added 13,000 jobs, and home health care services increased by 11,000.

Retail trade showed significant expansion with 34,000 new jobs, primarily driven by general merchandise retailers (+31,000) and furniture and home furnishings stores (+5,000). However, electronics and appliance retailers experienced a decline of 7,000 jobs.

The social assistance sector grew by 22,000 positions, with individual and family services accounting for 20,000 of those gains. Government employment continued its upward trend, adding 32,000 jobs in January, maintaining pace with its 2024 monthly average of 38,000. However, this data predates the recently announced federal workforce changes that began in mid-February.

One sector experiencing decline was mining, quarrying, and oil and gas extraction, which lost 8,000 jobs over the month, with losses concentrated in support activities for mining. Other major industries, including construction, manufacturing, wholesale trade, transportation and warehousing, information, financial activities, professional and business services, and leisure and hospitality, showed little change.

Average hourly earnings for all private-sector employees rose by 17 cents to $35.87, representing a 4.1 percent increase over the past 12 months. The average workweek for all employees on private nonfarm payrolls decreased slightly by 0.1 hour to 34.1 hours.

The report also revealed that previous employment estimates for November and December 2024 were revised upward by a combined 100,000 jobs. November's gains were adjusted from +212,000 to +261,000, while December's figures were revised from +256,000 to +307,000.

The labor force participation rate remained steady at 62.6 percent, while the employment-population ratio held at 60.1 percent. Both measures have shown relatively little movement in recent months.

The number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged at 1.4 million in January, representing 21.1 percent of all unemployed persons.

The data release noted that January's figures reflect updated population controls and the annual benchmarking process, which helps ensure accurate measurement of employment trends.

The February employment report, scheduled for release on March 7, will be closely watched by economists and market analysts, particularly for its first assessment of how recent federal workforce reductions may impact government employment numbers. The changes, which began in mid-February, have affected multiple federal agencies, including the Federal Aviation Administration, Department of Energy, and various health agencies.

These February developments occurred after the January survey period and are not reflected in the current report. The BLS employment situation report surveys reference the pay period that includes the 12th of each month.