Paul Wiseman, AP Economics Writer
WASHINGTON (AP) — U.S. employers added just 143,000 jobs last month, but the unemployment rate fell to 4% to start 2025.
The first monthly employment report of Donald Trump’s second presidency points to a solid but unseen labor market. Job creation in January hired 307,000 in December, starting from 261,000 added in November. The economists were hoping for around 170,000 new jobs in January.
As Trump prepares to shake up economic policy decisions by cutting federal jobs, leviing large taxes on foreign goods and deporting millions of undocumented workers. The outlook is uncertain. His tariffs and immigration crackdown could boost prices, turn many U.S. voters against President Joe Biden, and rekindle inflation that helped bring Trump back to the White House.
For now, most Americans still enjoy extraordinary job safety. However, for those looking for a job, hunting for jobs is becoming more difficult compared to the 2021-2023 red-hot recruitment days.
The average hourly wage has increased by 0.5% from December and 4.1% from January 2024. That could be a shame for the Federal Reserve inflationary fighters. Still, increasing US productivity offsets inflationary pressures from wage increases, allowing businesses to pay more and earn a hefty profit without raising prices.
“Employers really keep their workforce up, but they don’t employ that much and they don’t fire them,” said Gregory Dako, chief economist at consulting firm Ey Parthenon. Ta. DACO expects average employment growth to slow to 100,000-150,000 a month this year (a slight decline from the average 166,000 new jobs in 2024).
The Labor Bureau also revised its November and December salaries totaling 100,000.
Citing a strong upward revision from late 2024, High Frequency Economics Carl Weinberg and Marychen wrote, “There is no reason for concern about the strength of the economy in today’s employment report.” . But they added that they suggest that the Fed cannot be rushed to cut interest rates after employment has done so three times in 2024 in recent months.
Jobs in January were small. Healthcare (44,000 new hires), retail (34,000) and government (32,000) joined together to make up 77% of new employees last month. The mine has employed 8,000 people.
The Labor Bureau said the Los Angeles wildfires and cold snaps in the Northeast and Midwest had no “identifiable” impact on employment numbers in January.
The future is cloudy.
A federal judge on Thursday temporarily thwarted President Donald Trump’s plan to use financial incentives to push federal workers out. The federal employment freeze imposed by Trump on January 20 was “negative about employment growth,” he wrote last week.
Economists are also concerned about Trump’s threat to a trade war with other countries. He has already imposed a 10% tax on imports from China, threatening tariffs in Canada, Mexico and the European Union, and perhaps universal collection on all imports.
The tariffs paid by US importers but normally handed over to customers, falling from the four-year high that reached mid-2022, but appear to exceed the Fed’s 2% target. If tariffs push prices higher, the Fed can cancel or postpone two interest cuts it projected this year. That would be bad for economic growth and job creation.
Employers are also worried about economic fallout from Trump’s promise to deport millions of migrants working in the United States.
In Florida’s pool, maintenance and landscape company, Coastal Luxury Outdoors, they struggle to find workers.
“We are highly dependent on migrant labor. Even if we see a decline in demand due to tariffs and other factors, we need to increase staffing levels.”
Friedman said the company has a core management staff of around 12 people and field service staff that fluctuate by the season. Over 80% of outdoor workers are Hispanic, most of whom are foreign-born. Friedman said he was examining the immigration situation before the company could hire him.
“Because our work is so seasonal, we always replace a part of our workforce at least every year, and in an age of high-anti-immigrant sentiment, its sales are only more difficult to manage. That’s it,” he said.
The job market is already losing momentum. The economy recovers from COVID-19 lockdowns, up 2 million last year, from 2.6 million in 2023, 4.6 million in 2022 and a record 7.2 million in 2021. . Employers list fewer jobs, with monthly job openings falling from a record 12.2 million in March 2022 to 7.6 million in December.
As the labor market calms down, American workers lose confidence in their ability to find better wages and working conditions by changing jobs. The number of people in December has fallen from a record 4.5 million people, which is close to the height of the employment boom in April 2022.
In a regular annual revision, the Labor Bureau reported on Friday that job creation from April 2023 to March 2024 was not as good as initially reported. Over the course of 12 months, 589,000 jobs were created. Preliminary estimates released in August suggested a larger downward revision. Employed 818,000 people.
White House spokesman Caroline Levitt said on Friday that Joe Biden’s economy during presidency was “a lot worse than everyone thought.”
But while Trump has inherited a healthy unemployment rate and a stable economy, it doesn’t necessarily make him happy.
Trump is lending banks to tax cuts and regulatory curbs to strengthen the economy. However, his freeze on federal funding could halt infrastructure projects and manufacturing. His tariffs could hurt the retail sector, and his spending cuts could limit employment in the health and government sectors.
New York AP writer Anne Dino Inosio and Washington’s Josh Balk contributed to the story.
Original issue: February 7, 2025, 8:40am EST
