Volkswacht Bodensee - US sees slower January job growth, below expectations

While there were several winter storms during the month and devastating fires in California, the Labor Department said they did not have a clear impact, even though analysts warned they could bring uncertainty.

Looking ahead, heightened tariff risks and plans for slowing immigration under Trump may also give businesses some pause as they mull further hiring, economists said.

Total employment rose by 143,000 jobs last month, according to the Labor Department, significantly lower than the revised 307,000 figure in December.

The January number was also below an analyst consensus estimate of 155,000 according to Briefing.com.

Meanwhile, the jobless rate edged down to 4.0 percent from 4.1 percent, beating analyst expectations.

Wage growth was better than analysts expected, accelerating to 0.5 percent, the report showed.

The data indicate the US economy remained in good shape heading into Trump's second presidential term, which began on January 20, analysts noted.

White House Press Secretary Karoline Leavitt however said the report showed the economy under predecessor Joe Biden was "far worse than anyone thought, and underscores the necessity" of Trump's deregulatory agenda.

Kevin Hassett, director of the White House National Economic Council, took aim at downward revisions to last year's figures in the latest update, saying that the Trump administration has "a lot of work to do."

In a note, Nationwide chief economist Kathy Bostjancic said the annual employment revisions were "larger than usual" but not unexpected.

"Taken together, December and January payroll figures paint a strong picture of the economy," added Carl Weinberg and Mary Chen of High Frequency Economics.

They expect that with these figures, the US central bank would not be in a rush to cut interest rates.

- 'Wildcard' -

"Trade policy will likely be the biggest wildcard for 2025," said EY senior economist Lydia Boussour in a note this week.

"Steep tariffs and heightened policy uncertainty could push businesses to increasingly adopt wait-and-see behaviors and pull back on hiring as they navigate higher input costs and retaliatory measures," she warned.

This could lead to a more significant slowdown in hiring, weaker incomes and restrained consumer spending, she said.

Over the past weekend, Trump unveiled -- and then paused -- 25 percent tariffs on major US trading partners Canada and Mexico, which included a lower rate for Canadian energy imports.

But an additional 10 percent levy on Chinese imports, alongside a suspension of duty-free exemptions for low value goods, came into effect on Tuesday, triggering Beijing's announcement of retaliation.

Trump has also threatened tariffs on the European Union, and signaled he could target imports in sectors including semiconductors.

Ger Doyle, US country manager at ManpowerGroup, added in a note that "2025 is shaping up to be another year of significant changes."

"Our real-time data show total open job postings declined three percent, indicating a slight contraction in overall job demand," he said.

S.Leonhard--VB