Despite the Trump administration's ongoing trade war with China, the manufacturing sector also added 13,000 jobs. The economy needs to create roughly 100,000 jobs per month to keep up with growth in the working-age population.
However, December's jobs growth figure was revised to 222,000, down from an initial estimate of 312,000. Still, hiring has accelerated since last summer, a development that has surprised economists because hiring typically slows when unemployment is so low.
"Overall, it speaks to what we've known for a long time, that the labor market is one of the strongest parts of the economy". The Labor Department reported that 490,000 more people were working part-time in January but wanted full-time work, and the department noted that this "may reflect the impact of the partial federal government shutdown".
With key data from the Commerce Department, including the fourth-quarter gross domestic product report, still delayed because of the government shutdown, the employment report is the strongest evidence yet that the economy remains on solid ground.
Non-farm payroll expansion of 304,000 jobs far exceeded 165,000 estimates.
Yet strong hiring should boost household incomes, fueling more consumer spending, which would help drive economic growth.
MARTIN: So January - clearly, a big month for hiring.
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Wall Street rose following the report, with stocks boosted by the jobs numbers and a rosy report on activity in the USA manufacturing sector.
Spurred by an increasingly tight labor market, average wages continue to rise, gaining 3 cents per hour.
However, the five-week government shutdown - the result of an impasse between the president and Congress over his plans for a wall on the US-Mexico border - was at least partly responsible for an uptick in the jobless rate to 4.0 percent, the highest in seven months. And they classified furloughed workers differently.
Job growth increased broadly in January.
The Fed on Wednesday kept interest rates steady but said it would be patient in raising borrowing costs further this year.
Among the major worker groups, the unemployment rate for Hispanics increased to 4.9 percent in January. Retail employment, which has been essentially flat over the past year, rebounded by 20,800 jobs, while professional and business services employment increased by 30,000 jobs last month. For example, some of the furloughed federal workers and contractors who took part-time jobs during the 35-day government shutdown might have been counted as having two jobs during January. Over the year, leisure and hospitality has added 410,000 jobs.
Economists point to the job report as proof of the economy's underlying strength, despite noise from the markets or politicians. That was a sharp turnaround from January, when Fed policymakers forecast two additional hikes for this year.
Though Jacumin, 42, and her husband both have Navy pensions, her new job has provided much-needed income and health insurance.