US economy adds fewer-than-expected jobs in January

The US economy added fewer-than-expected jobs in January, while the unemployment rate retreated, showing mixed signals about the labor market in the world’s largest economy.

Nonfarm payrolls rose by a seasonally adjusted 143,000 in January, down from an upwardly revised 307,000 in December and below the 169,000 forecast from Dow Jones, the Bureau of Labor Statistics reported on Friday.

The unemployment rate nudged lower to 4% compared with forecasts to remain unchanged at 4.1%.

January increase aligns with the 2024 average of 166,000 jobs. The healthcare sector led growth, adding 44,000 jobs, retail (34,000), social assistance (22,000), and government employment (32,000). Conversely, the mining, quarrying, and oil and gas extraction sector lost 8,000 jobs.

The average hourly wages in January increased by 0.5%, or $0.17, to $35.87, potentially indicating rising inflationary pressures from the labor market in the early months of the new year.

The average workweek for all employees on private nonfarm payrolls fell to 34.1 hours in January.

Such data are likely to increase the possibility the Federal Reserve will continue with the monetary easing policy, given the slowdown in job creation despite the slight decline in unemployment.