The final few months of last year were pretty rough. Heading into the winter holiday, America was already feeling uncertain about the economy in the New Year. And then came the government shut down: which, while it did pertain to an issue about money, was not exactly related to the strength of the economy.
And then came some of the most volatile shifts in the job market the United States has seen in some time. But while things were looking quite dire only a week or so ago, the January jobs report seems to imply that things are finally looking up.
Apparently, the United States economy added 304,000 jobs in January. This is the biggest gain in nearly a year but, more importantly, continues a consecutive 100-month trend of job growth—the longest of such trends in the history of the American economy.
That said, it should also be noted that unemployment also rose in January, though on the much smaller scale from 3.9 percent to 4 percent. However, the US Department of Labor attests this number is technical and not actual: the number of people temporarily unemployed increased by 175,000 in January, but most of that population consists of government workers furloughed from the shutdown.
All that in mind, then, the government made a sharp downward revision to its original job growth estimates from November and December. It should still be noted that hiring has, in fact, accelerated since the summer. This development is somewhat surprising to economists, who would normally expect hiring to slow when unemployment is as low as it is now.
Now it might seem that the numbers are inflated because of the government shutdown but experts remind that if we saw job growth it means that people who wanted work were able to find it. Essentially, it does not matter where the workers are coming from: if people can find work, that means the economy is strong.
And if those government workers were to retain their jobs now that the shutdown is over, the jobs they vacate will still be available! Either way, of course, hiring is strong and strong hiring leads to higher household incomes which leads to increased consumer spending which ultimately leads to economic growth.