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The economy added 225,000 jobs in January, showing continued strength

A container ship is unloaded in Portsmouth, Va., in 2019. (Steve Helber/AP)

The U.S. economy added 225,000 jobs in January, a surprising sign of continued strength for the economy.

The unemployment rate ticked up slightly to 3.6 percent, mostly due to more people rejoining the labor force. The jobless rate remains near a 50-year low.

The areas of strongest job growth came in construction and health care, as well as transportation and warehousing, according to the Bureau of Labor Statistics. Retail and manufacturing were the two areas with the most significant job losses.

“I can say that it pretty much blew estimates out of the water,” said Beth Ann Bovino, the U.S. chief economist at S&P Global. “It’s just a really nice report. I’d also say that the recession fears of last year seem to be a thing of the past when you look at this report.”

The number of jobs added for the month was well above the average of 176,000 jobs per month in 2019 and higher than the 223,000 jobs added each month of 2018. In 2019, the United States added 269,999 jobs in January, an uptick that federal statisticians surmised had spiked because of the government shutdown as people took on part-time jobs. January was the 112th straight month of job growth since 2010.

The new report comes on the heels of a milestone December, when women outnumbered men in the workforce for only the second time in history. That number was unchanged in January, with women continuing to make up slightly more than 50 percent of the non-farm labor force.

How healthy is Trump’s economy?

Perhaps the most encouraging news in the latest jobs report is that the share of working Americans who have jobs or are actively looking for work — known as the labor force participation rate — ticked up to its highest level in seven years, about 63.4 percent. It’s another sign that the tight labor market is wooing more people back to the job market.

“It’s a really strong start to the year and another sign that this expansion has really astounded by continuing to pull folks into the labor force,” said Nick Bunker, an economist at the Indeed Hiring Lab. “The strong labor gains are great — we’re not only seeing a rise in labor force participation but a pickup in employment as well. It’s a sign that the labor market has some momentum and could keep going for quite some time.”

Women outnumber men in the American workforce for only the second time

President Trump is staking his reelection campaign in part on the strength of the economy — touting the job creation under his administration repeatedly during the State of the Union address, for example.

But analysts have urged caution, pointing to other economic measures. Relatively modest wage growth, around 3.1 percent, remains a puzzle for economists who say it has not grown as expected given the increasingly tight labor market. Business investment has fallen for three straight quarters. And problems at Boeing as well as fears about the coronavirus have raised fears about more economic head winds on the horizon.

“It’s a powerful antidote, in many ways, with respect to what’s been happening in Washington,” said Mark Hamrick, an economic analyst at Bankrate. “In many ways we’ve seen a political environment that is violently ill, and yet the economy appears to be very robust. ... A year or so ago we were thinking we could be on the precipice of a recession. The reality is that the expansion looks good for some time to come for the future."

The Labor Department also released data Friday showing that 514,000 fewer jobs were added between April 2018 and March 2019 than originally thought. The initial data reported each month in the jobs report comes from a survey sample of businesses to see how many people were added or subtracted from payrolls. The revised data encompasses nearly all businesses in the United States, but it takes longer to gather the information, which is why there is a delay in releasing it.

The revisions show that 2019 was the weakest year of job growth in eight years and that there was not such a big job boom in 2018 after the Trump administration’s tax cuts. Instead, what has become clearer is the job market remains fairly hot, but job growth has been gradually slowing since it peaked in 2014.

“Job growth still looks very healthy,” said economist Ernie Tedeschi, a managing director at the research firm Evercore ISI. “But the story that the tax cuts heated up the labor market in 2018 changes a bit. Instead of job growth really accelerating in 2018, it looks more like it stayed pretty flat.”

The jobs report is the first since Trump signed the U.S.-Mexico-Canada Agreement in January and comes weeks after Trump signed a partial trade deal with China, ending months of uncertainty over some of his major economic proposals. Some experts suggested the trade deals helped shore up confidence among companies last month.

“It’s not a stretch to connect progress on things like USMCA and the China deal to restoring a sense of certainty,” said Neil Bradley, the chief policy officer for the U.S. Chamber of Commerce.