The Dow Jones Industrial Average rose over 150 points on Friday as nonfarm payrolls were higher despite the 35-day government shutdown.
Job growth during the month of January bested expectations as nonfarm payrolls gained 304,000, according to the latest data from the Labor Department. However, the unemployment rate did tick higher to 4 percent.
“The labor force was little changed but the drop in employment was enough to lift the participation rate by a tenth to a new cycle high,” said Ian Shepherdson, the chief economist at Pantheon Macroeconomics. “But the increase in participation in recent months is not enough yet to call a meaningful shift from the flat trend of the past few years, and we still expect unemployment to fall over the course of this year.”
Government officials noted that during the shutdown, federal workers were included as employed during the period because they received pay during the survey week of Jan. 12. In actuality, federal government employment rose by 1,000.
Economists who were surveyed by Dow Jones were expecting payrolls to rise by 170,000 while the unemployment rate would remain static at 3.9 percent.
“Certainly, the economy has slowed, and that will undoubtedly be apparent in other data in the coming weeks. Still, the jobs market remains a bright spot,” said Jim Baird, chief investment officer for Plante Moran Financial Advisors. “Employers are still hiring at a strong pace. That’s good news for the consumer sector, and ultimately good news for the economy.”
Wage Growth Languishes
Despite the strong rise in payrolls, average hourly earnings ticked higher by just 3 cents during January, which represented a rise of 0.1 percent–below the 0.3 percent expected. Nonetheless, this was still a 3.2 percent year-over-year increase.
Nonetheless, economists still emphasize the labor market is robust.
“Despite the uncertainty heading into today about how the recent federal government shutdown may impact the economy, today’s jobs report shows the nation’s labor market overall remained healthy in January, and employers are likely to continue today’s steady pace of hiring throughout the first half of 2019,” said Andrew Chamberlain, the chief economist at the career site Glassdoor.
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