By Jeanne Whalen and Justin Lahart

The U.S. economy added 143,000 jobs in January and the unemployment rate edged down to 4%, the Labor Department said Friday.

The gain in jobs was less than the 169,000 jobs that economists had expected, according to a Wall Street Journal survey. But the job counts for November and December were revised upward by a combined 100,000.

The unemployment rate was below the 4.1% that had been expected.

Sectors including healthcare and retail added jobs. Employment declined in mining and oil and gas extraction.

The jobs figures are the final report of the Biden era, and come as newly sworn-in President Trump rolls out policies likely to affect the labor market. He has promised to cut immigration and says he is launching the largest deportation operation in U.S. history, which could curtail growth in the labor force. JPMorgan analysts say that an immigration slowdown could "start to affect payroll growth soon, potentially by the time of the February jobs report."

Tariffs are another wild card. Trump has already imposed new import tariffs on Chinese goods and has threatened new tariffs on products from Canada, Mexico and the European Union. Economists warn that such levies could crimp trade, economic growth and the labor market.

"I expect tariffs will be negative overall for job growth," Guy Berger, director of economic research at Burning Glass Institute, a think tank, said before Friday's data release.

Labor economists are also watching the Trump administration's efforts to cut government spending and to encourage government workers to resign.

Trump has said his policy plans, including new import tariffs and corporate tax cuts, will spur more factory construction and manufacturing job growth.

The job market has cooled from its red-hot streak that began during the pandemic, but it remains strong. Hiring and job-quitting have both slowed, but layoffs remain at longtime lows.

Last week, the Federal Reserve hit the pause button on recent interest rate cuts, entering a new wait-and-see phase and drawing a rebuke from Trump. Fed Chair Jerome Powell said the Fed would need to see "real progress on inflation" or unexpected weakness in the labor market before considering further rate reductions.

Economists said the wildfires that hit Los Angeles last month likely weighed on the January jobs figures. Roughly 0.5% of California's population were under an evacuation order during the fires, Goldman Sachs economists note. What's more, a particularly cold January nationwide is likely to have weighed on employment.

Write to Jeanne Whalen at Jeanne.Whalen@wsj.com and Justin Lahart at Justin.Lahart@wsj.com

(END) Dow Jones Newswires

February 07, 2025 08:50 ET (13:50 GMT)

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