In January 2025, U.S. employers added 143,000 jobs, with the unemployment rate falling to 4%. This marks a slowdown from the 307,000 new jobs added in December and 263,000 in November. Economists had expected around 170,000 new jobs. Additionally, the U.S. Labor Department revised November and December payrolls upward by 100,000 combined.
Job: Wage Growth and Sector Performance
Average hourly wages rose 0.5% from December and 4.1% year-over-year, exceeding analysts’ expectations. This could complicate the Federal Reserve’s efforts to manage inflation. The healthcare sector added 44,000 jobs, falling short of the 2024 monthly average of 57,000, while retail hiring surged by 34,000 positions. Government agencies also contributed with 32,000 jobs. The mining sector, however, lost 8,000 positions.
Political and Economic Risks Loom
While the labor market remains solid, significant risks to economic stability are emerging. A federal judge recently blocked a Trump administration plan to incentivize federal workers to retire, although the January hiring freeze could hurt future job growth. This freeze, implemented after the Labor Department collected January employment data, will likely impact future job reports.
Moreover, President Trump’s trade policies are creating uncertainty. The imposition of a 10% tariff on Chinese imports and the threat of tariffs on Canada, Mexico, and the European Union could reignite inflation. If tariffs drive up prices, the Federal Reserve may delay or cancel anticipated interest rate cuts for 2025, which could harm job creation and economic growth.
Cooling Labor Market and Decreased Worker Confidence
The job market has cooled significantly since the 2021-2023 boom, with employers adding 2.2 million jobs in 2024—fewer than the 3 million in 2023 and 4.5 million in 2022. Job openings also fell from a peak of 12.2 million in March 2022 to 7.6 million in December 2024.
Workers are becoming less confident in finding better opportunities, with voluntary resignations dropping to 3.2 million in December, down from a peak of 4.5 million in April 2022.
Despite this, layoffs remain below pre-pandemic levels, suggesting job security remains relatively high for those already employed.
Revisions to Employment Data Pending
The Department of Labor will soon release revisions that are expected to show weaker-than-expected job growth between April 2023 and March 2024. Preliminary figures from August revealed 818,000 fewer jobs created than initially reported. These revisions will become official and adjust the historical employment data.
Keep up with the most important news of Economic World of Miami in all the platforms of Mundo Ejecutivo and in its social networks.
