Added 304,000 Jobs in January, Dismissing Concerns of a Shutdown Effect

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Last month, the economy of the United States of America added more than 300,000 jobs despite the USA government shutdown. Transportation, leisure and hospitality, construction and health care led the job gains.

Tens of thousands of contracted federal employees that were not working during the government shutdown and are not legally entitled to compensation equal to the hours they missed may have been counted as unemployed in the DOL's numbers for January.

Another factor contributing to unemployment is the labor force participation rate, which has grown by half a percent since September and hit 63.2 percent in January-the highest in more than five years.

In the United States, jobs have now grown for a record 100 consecutive months, dating back to October 2010. The central bank, which raised rates four times past year, did not raise rates and cited "global economic and financial developments" and low US inflation as reasons to be patient before changing rates again.


The American economy added 304,000 jobs in January. Also worth noting was that the more than 300,000 federal workers who were furloughed had an impact on the reporting.

With key data from the Commerce Department, including the fourth-quarter gross domestic product report, still delayed because of the government shutdown, the employment report is the strongest evidence yet that the economy remains on solid ground.

This whole process is known as the "establishment survey", and the Labor Department has used this methodology for previous shutdowns, which also showed no impact on monthly job gains. It didn't affect the numbers because of some technicalities of who the government considered unemployed in January.

All 800,000 workers are now back on the job and will receive back pay after Republican and Democratic lawmakers reached a deal to reopen the government for three weeks while they try to work out an agreement on border security. They were not included in the unemployment rate, either.


ADP reported private sector employment increased by 213,000 jobs in January.

"So, what we'll say if we were to see that negative number is, 'Well, sure it was negative this, but if you adjust for the furlough, it looks like another plus-200 month, '" Council of Economic Advisers chairman Kevin Hassett told reporters last month. But the longest shutdown in history, which ended a week ago, pushed up the unemployment rate to a seven-month high of 4.0 percent.

NOGUCHI: You're right. The longer term trend is what matters. Job growth around 120,000 is more than enough to keep the unemployment rate under 4%. Many economists and investors took that as a sign that a rate increase is unlikely any time in the coming months.

President Donald Trump, a cheerleader for good economic data, celebrated the numbers by posting a tweet on February 1: "JOBS, JOBS, JOBS!"


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