The U.S. economy added a robust 304,000 jobs in January, easily topping expectations and providing the latest sign that the nine-year expansion remains on track despite concerns about slowing global growth.
The Labor Department’s report Friday also showed that wages rebounded last month after a disappointing December, a sign that workers are finally starting to see bigger paychecks after years of sluggish gains.
The job gains were widespread, with manufacturing, construction, health care, retail and transportation all adding jobs. The unemployment rate ticked up to 4 percent from 3.9 percent in December, but that was because more people began looking for work, a sign of confidence in the job market.
All told, the report showed that the U.S. economy entered 2019 with considerable momentum, despite concerns that a partial shutdown of the federal government that began in December and lasted 35 days could slow growth.
The job gains last month were the most since February 2018 and followed a solid gain of 222,000 in December. They suggest that businesses remain confident enough in the economy’s prospects to keep hiring despite concerns about a possible downturn later this year.
The January report “provides more evidence that the U.S. economy is still on solid footing,” said Gus Faucher, chief economist at PNC Financial Services. “The job market is still strong.”
The solid job gains could also ease concerns at the Federal Reserve, which has been gradually raising interest rates to prevent the economy from overheating. The Fed has said it plans to do that at a “gradual” pace, and Friday’s report is likely to reinforce that view.
The Fed raised rates four times last year and has signaled that it plans two more increases this year. But some economists believe the central bank could slow its rate hikes if the economy shows more signs of weakness.
The job market has been a bright spot in the economy in recent years. The economy has added jobs for 103 straight months, the longest such streak on record. And the unemployment rate, which peaked at 10 percent in October 2009 in the aftermath of the Great Recession, has fallen steadily and is now at a nearly five-decade low.
Still, the job market isn’t perfect. The number of people working part time but who would prefer full-time work remains elevated, and the “underemployment” rate, which includes those people, ticked up to 8.1 percent in January.
And while the unemployment rate for blacks and Hispanics has reached record lows, the jobless rate for workers without a high school diploma — 4.9 percent — is still more than double the rate for college graduates.
The solid job gains in January were all the more impressive because they occurred despite the partial shutdown of the federal government, which furloughed 380,000 workers and forced another 420,000 to work without pay.
The report showed that federal workers who were furloughed were counted as unemployed last month, while those who worked without pay were counted as employed. The shutdown reduced job growth by an estimated 10,000 in January, the report said.
But even without the federal workers, job growth would have been a solid294,000. And the report showed that the private sector added a robust 296,000 jobs last month.
The solid job gains helped push up wages last month. Average hourly pay rose 3 cents to $27.56 in January, after a disappointing 0.2 percent gain in December.
Over the past 12 months, hourly pay has risen 3.2 percent, a solid gain but still below the roughly 4 percent pace that is typical when the unemployment rate is this low.
The solid job market is helping to support consumer spending, which accounts for 70 percent of economic activity. That spending has been bolstered by the tax cuts that took effect last year and by steady gains in home values and stock portfolios.
The economy grew at a solid 3.4 percent annual pace in the July-September quarter, the government reported last month. And economists believe growth remained solid in the final three months of last year, though the government won’t release that report until late February.
Some economists believe growth could slow this year as the effects of the tax cuts and federal spending increase fade. And the partial shutdown of the government, which delayed the release of key economic data, could make it difficult to get a clear picture of the economy’s health in the coming months.
But for now, the job market remains a bright spot.
“This is a very solid report,” said Mark Zandi, chief economist at Moody’s Analytics. “It’s a reminder that the U.S. labor market is