Despite Federal Shutdown, Job Market Roars Ahead in January

February 1, 2019

The latest jobs numbers are out from the federal government. What do they mean for job seekers and employers? Here’s a quick take from Glassdoor’s Chief Economist Dr. Andrew Chamberlain:

This morning’s jobs report revealed a strong and growing job market in January, despite fears that the longest federal government shutdown in history might drag down hiring. Employers added 304,000 new jobs to payrolls last month, well above economists’ expectations — a sign that the economy’s fundamentals remain solid as we enter 2019.

Because of quirks in how the roughly 800,000 impacted federal workers were counted during last month’s government shutdown, the nation’s unemployment rate rose slightly to 4.0 percent. That’s likely a statistical blip that will be reversed next month as federal employees head back to work.

One likely symptom of the federal shutdown was a huge 490,000 increase in the number of Americans who said they were working part time for economic reasons in January. That’s likely due in part to impacted federal workers taking temporary jobs to make ends meet during the shutdown. Research at Glassdoor showed a 10 percent jump in the number of federal employees looking for new jobs on Glassdoor as the recent shutdown dragged on.

Wage gains remained on their upward path in January, with average hourly earnings up 3.2 percent from a year ago, matching the strong pace of last month. There has been a steady escalation of wage gains across many different measures of pay over the past year, and today’s report reinforced that worker’s paychecks are rising thanks to the tight labor market. Glassdoor’s Local Pay Reports showed U.S. pay gains steady in January. 

The strong January jobs report also revealed more Americans were pulled off the sidelines of the economy into jobs last month, with the labor force participation rate ticking up slightly to 63.2 percent, up 0.1 percent from last month. Big demographic shifts are pulling down workforce participation as Baby Boomers retire, so any steadying or upward movement is a sign of a robust hiring market attracting new talent.

The biggest job gains in January among industries were in leisure and hospitality, which added a strong 74,000 jobs alone last month. Other big gains were in construction (+52,000 jobs), health care (+45,400 jobs), professional and business services (+30,000 jobs), transportation and warehousing (+26,600 jobs), and retail (+20,800 jobs).

Today’s jobs report marks a historic milestone for the economy. The nation has now added jobs to payrolls for 100 consecutive months, the longest steak on record since the federal government began tracking payrolls in the 1930s. The nation’s current economic expansion is now 115 months old. If good times continue for 5 more months, we’ll reach the record for longest-ever period without a recession: 120 months (a record set during the long expansion of the 1990s).

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.

To speak with Dr. Andrew Chamberlain about today’s jobs report or to discuss labor market trends, contact pr at Glassdoor dot com. For the latest economics and labor market updates, follow @adchamberlain on Twitter and subscribe to Glassdoor Economic Research.