US economy added 250,00 jobs last month as the unemployment rate dipped below 4% and retail sales surged to their fastest pace in nearly a decade.
The unemployment rate fell below 4.1% for the first time in three months.
The unemployment rate rose slightly to 4.0% in January, a bit below the Federal Reserve’s 2% target.
The jobless rate is closely watched as a sign of whether the economy is growing at a healthy pace or contracting.
A jobless gain of more than 500,000 a month would mean the economy expanded at a more than 2% annual pace.
“While the labor market is clearly improving, we continue to see signs of a slowing economy, including slowing consumer spending and a decrease in the number of jobs created,” the Labor Department said in a statement.
The number of unemployed Americans increased to a record 4.2 million, a jump of about 3 million people from the prior month.
The number of people working part time also increased, to about 4.3 million.
The Labor Department’s jobs report was released on Thursday, just days after the government ended its annual holiday survey, which was scheduled to be conducted in a staggered fashion through November.
The last such survey was conducted in October.
“We are expecting to see a continuing rise in the unemployment rates as more people enter the labor force,” said Mark Zandi, chief economist at Moody’s Analytics.
The economy added 243,000 private-sector jobs last year, an increase of about 1,200.
The government counted another 990,000 part-time jobs, bringing the number to about 536,000.
The labor market added about 1.2m private-and-part-time workers in January.
“The economy is continuing to strengthen.
This recovery has been built on strong hiring and growth in hiring, so we continue our momentum,” Fed Chairwoman Janet Yellen said in her first news conference as Fed chair in two months.”
Despite some bumps in the road, we remain hopeful that the pace of job growth will continue,” she said.
The labor market report was largely consistent with forecasts from the private-equity world.
Wall Street has long been forecasting that the economy will add more than a million jobs a month through the end of 2017, after peaking at more than 100,000 in April.
Economists at JPMorgan Chase & Morgan Stanley predicted an average of 1.9 million new jobs a week in January as the economy continued to gain momentum.
The median estimate for the jobs market in February was 2.6 million.
The consensus forecast was 1.8 million.
Economists had expected to see the jobless numbers climb as employers hired more workers, particularly in manufacturing and services, in the months ahead.
But there were no signs of any substantial gains in those sectors.
“Even with the seasonal effects of the Christmas holidays, it’s still early in the recovery.
We still don’t see a lot of signs that the recovery is getting under way,” said Brian Deese, chief investment officer at FirstPoint Financial.
For the month, employment rose by 1.1 million jobs.
The manufacturing sector added 1.4 million jobs, mostly in manufacturing but also in retail and wholesale trade.
The services sector added 534,000 workers, mostly part-timers.
The construction sector added more than 1 million jobs in January and February.
Retailers added 2.2.
Construction jobs rose the most, rising by 2.7 million in January to 3.8.
The services sector lost 1.7.
Construction jobs were flat.
The nonfarm payrolls report showed the economy added a modest 0.9% in April to a seasonally adjusted 1.5% annual rate.
That was the smallest increase since February 2016.
The Bureau of Labor Statistics on Friday reported that the unemployment benefit for January was $6,000, up from $5,000 for the previous month.
That’s still well below the rate of $8,000 the Fed had set for the current quarter.
But economists said the benefit will likely continue to rise.
“As the economy gets stronger, the economy continues to grow, and the unemployment benefits will rise,” said Daniel Fagan, senior economist at TD Securities.