U.S. Added 304,000 Jobs In January; Shutdown Boosted Unemployment To 4 Percent Job growth picked up for the 100th consecutive month even as hundreds of thousands of federal workers were furloughed during the partial government shutdown. Wage growth held steady.

U.S. Added 304,000 Jobs In January; Shutdown Boosted Unemployment To 4 Percent

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The hundreds of thousands of government workers who were furloughed or working without pay did not have a negative effect on the job market. The Department of Labor reports this morning that employers in this country added 304,000 jobs last month. NPR's Yuki Noguchi is in the studio for more.

Hi, Yuki.


MARTIN: What do these numbers show?

NOGUCHI: Well, as you mentioned, hiring was, surprisingly, very strong - 304,000. That's way beyond what analysts were expecting. And a lot of the hiring was in restaurants and hotels, construction and health care. But the unemployment rate was 4 percent, which was a small hike from the 3.9 percent level in December.

MARTIN: So explain how it seems to indicate that the government shutdown, which affected 800,000 federal workers, that had virtually no effect on the job market.

NOGUCHI: Yeah, it's a little confusing. It didn't affect the numbers because of some technicalities of who the government considered unemployed in January. So there are two separate surveys. And they classified furloughed workers differently. One of them is the payroll survey, which measures hiring. And that one counted furloughed workers as employed, even if they were sitting at home and not collecting a paycheck. But since Congress agreed to pay these workers retroactively, they were employed. But in the other survey, which measures the jobless rate, a lot of these same workers were counted as unemployed.

MARTIN: So what kind of impact did that have on the jobless rate in January?

NOGUCHI: It did have an effect but a small one. You saw the unemployment rate go to 4 percent. That's an uptick of 1/10 of a percentage point. But that effect is likely temporary.

MARTIN: So does that mean the job market, basically, escaped largely unscathed because of the shutdown last month?

NOGUCHI: Not entirely - the Congressional Budget Office this week said the shutdown reduced federal spending and cut into economic growth. Now, that would definitely hit federal contractors, who make up the biggest segment of those that do government work. They don't get paid back after the furlough ended. And some of them were laid off. That might help explain why we saw a spike earlier this week in initial claims for unemployment insurance. And the number of people working part time but looking for more work increased a lot last month. Probably, those are government workers and contractors looking to bridge that period with temporary work. But then, you know, Rachel, the overall context is that unemployment is still very low.

MARTIN: Right.

NOGUCHI: Private sector can't fill jobs. And so we'll have to wait to see more data. But the government shutdown caused, you know, some delays in other economic reports. So we'll have to wait to see what those say.

MARTIN: So January - clearly, a big month for hiring. How does that fit into the overall employment trajectory?

NOGUCHI: You're right. The longer term trend is what matters. And this latest data doesn't actually change the monthly average very much. January marks the 100th straight month of job growth. That's a very long run of growth. The unemployment rate is so low at this point that there are just fewer people who don't already have jobs. And that's great news for workers because that lack of available workforce means that employers have to pay more. And last month, you saw average hourly earnings increase by an annual rate of 3.2 percent. That's considered pretty strong. So we may start to see hiring level off but wages continue to increase.

MARTIN: All right. NPR's Yuki Noguchi for us this morning with those new jobs numbers. Thanks so much, Yuki.

NOGUCHI: Thank you, Rachel.

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