U.S. added 143,000 jobs in January, jobless rate drops
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The job market kicked off 2025 with solid hiring: The economy added 143,000 jobs in January, while the unemployment rate dropped to 4%, the Labor Department said on Friday.
Why it matters: The pace of hiring cooled from the final months of 2024, but the labor market continues to be on solid footing, which has helped the economy defy slowdown fears.
By the numbers: Friday's report also includes annual revisions of previous years' data, which showed roughly 590,000 fewer jobs added than initially estimated in 2024.
- That revision was as expected.
The big picture: The Federal Reserve kept interest rates on hold last month after successive rate cuts, citing a healthy economy and labor market that left ample time to consider what the central bank should do next.
What to watch: The pause also allows officials to monitor the economic impacts of Trump policy — including possible trade wars that could increase inflation, which would weigh on hiring and the broader economy.
- The possibility of a North American trade war looks more distant — at least for now. But China is set to retaliate with 15% tariffs on select U.S. goods starting next week, raising the stakes.
The bottom line: The labor market entered 2025 on a solid note.
- So far the economy's strength has surprised forecasters anticipating a slowdown. There are huge uncertainties about whether that dynamic will continue.
