U.S. job growth surges, unemployment rate rises to 4.0%

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U.S. job growth surged in January, with employers hiring the most workers in 11 months, the U.S. Department of Labor (DOL) reported Friday. But the disruption caused by the government shutdown contributed to pushing the unemployment rate to four percent.

Employers added 304,000 net new positions last month, almost double what economists had predicted, while growth in worker pay held steady just above inflation, according to the report.

Hiring in December was revised sharply downward to a still-strong 222,000, but far lower than the 312,000 positions initially reported.

While the partial shutdown of the federal government between December and January idled 800,000 government workers, the DOL still counted furloughed employees, who would receive back pay, as employed, leaving the monthly job creation numbers unaffected.

Shutdown boosts unemployment

The five-week government shutdown was at least partly responsible for an uptick in the jobless rate to four percent, the highest in seven months.

The separate survey of households used to determine the joblessness counted furloughed workers as well as contractors as unemployed.

Meanwhile, the increase in unemployment also was the result of more workers coming off the sidelines to join the job hunt. That increased the size of the labor force, driving the closely watched labor-force participation rate up to 63.2 percent, its highest level in more than five years.

The shutdown also drove about a half million people into part-time work, swelling this group to 5.1 million, its highest level in 16 months.

Hourly pay grew a token 0.1 percent over December but was up 3.2 percent over January of last year, well above consumer inflation of 1.9 percent in the same period, leaving American workers with greater purchasing power.

Employment in leisure and hospitality grew by 74,000 jobs for the month, with restaurants and bars adding 32,000, while construction added 52,000 workers and hospitals and ambulatory care centers together added about 41,000 net new positions.

Source(s): AFP