The unemployment rate is falling to 4%, wages are rising more than expected as the US labor market remains resistant to starting 2025

The US labor market showed continued signs of resilience in January when unemployment unexpectedly declined, wages grew more than expected, and December’s monthly job gains were revised higher to show the US labor market that left 2024 on even better foot than previously reported.

Data from Bureau of Labor Statistics Published Friday showed that unemployment fell to 4% in January from 4.1% the month before. Unemployment is now sitting at its lowest level since May 2024.

143,000 new jobs were established in January, less than the 170,000 expected by economists, and lower than the 307,000 seen in December. December’s monthly job gains were revised higher from a previous reading of 256,000. Meanwhile, November’s monthly job additions were also revised higher. Across November and December, the US labor market added 100,000 more jobs than originally assumed.

Wage growth, an important measure for inflation measurement, increased 4.1% compared to the previous year in January, from 3.9% in December and over the 3.8% economists had expected. On a monthly basis, wages rose 0.5% above the 0.3% seen the previous month.

Meanwhile, the workforce’s participation rate marked up to 62.6% from 62.5%.

The report shows “that people have jobs. Most of the people who want jobs have them and people who have jobs get paid more,” Steve Sosnick, chief strategist at interactive brokers, told Yahoo Finance. He added, “This incenters not bold to do something right now.”

This is a breach of news posts. More to come …

Josh Schapher is a reporter for Yahoo Finance. Follow him on x @_joshschapher.

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