U.S. nonfarm payrolls increase slightly less than forecast in January; unemployment rate unexpectedly drops

The U.S. Labor Department announced on Friday that nonfarm payrolls rose by 49,000 in January after a revised 227,000 decline in the prior month (originally a decrease of 140,000), reflecting the impact of the coronavirus pandemic and efforts to contain it.

According to the report, notable job gains in January were recorded in professional and business services and in both public and private education, which, however, were offset by losses in leisure and hospitality, in retail trade, in health care, and in transportation and warehousing.

The unemployment rate fell to 6.3 percent in January from 6.7 percent in December.

Economists had forecast the nonfarm payrolls to increase by 50,000 and the jobless rate to remain at 6.7 percent.

The labor force participation rate edged down to 61.4 percent from 61.5 percent in December, while hourly earnings for private-sector workers rose 0.2 percent m-o-m (or $0.06) to $29.96, following a revised 1.0 percent m-o-m advance in December (originally a gain of 0.8 percent m-o-m). Economists had forecast the average hourly earnings to increase 0.3 percent m-o-m in January. Over the year, average hourly earnings surged by 5.4 percent in January, following a revised 5.4 percent rise in December (originally an advance of 5.1 percent).

The average workweek increased by 0.3 hour to 35.0 hours in January, being above economists' forecast for 34.7 hours.