US job growth surges in Jan despite govt shutdown

An employment sign hangs from a wooden fence on the property of a McDonald's restaurant Thursday Jan. 3 2019 in Atlantic Highlands N.J

Julio Cortez AP

While the Congressional Budget Office estimated that the partial government shutdown cost the USA gross domestic product $11 billion ($8 billion of which is expected to be recovered later in the year), the Bureau of Labor Statistics reported that it had little effect on hiring. Education and health care added 55,000 jobs, retailers almost 21,000 and professional and business services, which includes such higher-paying positions as engineers and architects, 30,000.The ongoing demand for workers is leading some businesses to offer higher pay to attract and keep staff. Following revisions, job gains have averaged 241,000 per month since November. Average hourly earnings grew 3.2 percent over the past 12 months - topping the 3.2 percentincrease in December. This suggests that the measured number of unemployed will fall in February, lowering the unemployment rate below 4%. Last week's applications for unemployment benefits came in at 253,000, above from the 49-year low hit earlier in the month but still low by historical standards.

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 January report marks the 100th straight month of job gains.

With key data from the Commerce Department, including the fourth-quarter gross domestic product report, still delayed because of the government shutdown, the employment report is the clearest sign that the economy remains on solid ground. The numbers, released Friday by the Labor Department, show that much of the private sector was unphased by the shutdown that furloughed some 380,000 federal workers and forced about 420,000 to work without pay.

How did the shutdown affect jobs?

Yet even employers whose revenue dropped likely held onto their workers during January.

But in a separate survey of households that's used to calculate the unemployment rate, some of these people were counted as temporarily jobless. Now, that would definitely hit federal contractors, who make up the biggest segment of those that do government work. Notable gains occurred in the retail sector (21,000), transportation and warehousing (27,000), and education and health services (55,000).

The rate of industry hiring came during a surprisingly robust month for overall job growth.

The 35-day government shutdown caused 800,000 workers to miss two paychecks.

"This is the sweet spot for investors right now", Long said.

Yet with unemployment so low and many companies struggling to fill jobs, layoffs might not have been widespread.

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