The unemployment rate ticked up to 4 percent from 3.9 percent, as more workers looked for jobs.December’s payrolls were revised down to 222,000 from 312,000, but November was revised higher to 196,000 from 176,000.
“Who is calling for a recession this year again? Whoever it is, you can forget about it after a picture-perfect jobs report to start the year off right,” wrote Chris Rupkey, chief financial economist at MUFG.
The government shutdown may have shown up in a jump of 500,000 in the number of people employed part time for economic reasons, according to the Bureau of Labor Statistics.
Diane Swonk, chief economist at Grant Thornton, said the government workers and contractors, who also weren’t paid in the 35-day shutdown, may have found part-time jobs and temporarily boosted the total non farm payroll number.
The big surge in part-time employment likely includes contractors who worked for the government and other workers that were impacted in addition to government workers, she said. That could reverse and continue to muddy the employment data.
“They were doing more than Uber. They boosted the payroll data,” she said. “That’s basically someone going out and getting a job to pay their expenses. It’s more than just the government workers…The good news is a lot of them got some part time work.”
But job growth is still running at a solid pace. “It’s still probably about 200,000. It’s still a good number. The composition was good with manufacturing and construction up. That’s always good,” she said. “These numbers show the consumer is still there to carry the day, for the moment…We’ll get a much better read as we get through the quarter.”
“If you look at the December [jobs] revision, and the number we got, it continues to show a firm trend,” said John Briggs, head of strategy at NatWest. “We haven’t seen recession fears spillover into the corporate hiring picture. It’s not as firmly solid as last month where you had every indicator, including the household survey strong. But it certainly pushes back recent concerns, at least on hiring.”
Treasury yields rose and stocks futures rallied early after the jobs report showed strong growth in leisure, construction, health care, transportation and warehousing employment. The 2-year Treasury yield, which reflects Fed policy, rose to 2.48 percent and moved to 2.51, its high of the session after the ISM report.
“Net, net, it’s full speed ahead for the economy this year if today’s blockbuster report on new jobs is to be believed, and we think it is,” Rupkey notes. “U.S. companies have not let up one bit on their hiring in response to risks out there in the world economy, chiefly China and Europe, the Federal government shutdown, the economic war with China. Nothing, but nothing is getting in the way of onboarding new employees to work the factory floors and staff the shops and malls across America.”