U.S. employers added just 143,000 jobs last month, but the unemployment rate fell to 4% to start 2025.

The first monthly jobs report of Donald Trump’s second presidency points to a solid but unspectacular labor market. January job creation dipped from the 261,000 added in November, and 307,000 in December. Economists had expected about 170,000 new jobs in January.

The outlook is uncertain as Trump prepares to shake up economic policymaking by cutting federal jobs, imposing big taxes on foreign goods and deporting millions of undocumented workers. His tariffs and immigration crackdown could push up prices, potentially rekindling the inflation that turned many U.S. voters against President Joe Biden and helped return Trump to the White House.

For now, most Americans still enjoy unusual job security. But for those looking for work, the job hunt has been getting harder compared with the red-hot hiring days of 2021-2023.

Average hourly wages rose by 0.5% from December and 4.1% from January 2024, a bit hotter than forecasters had expected. That may be disappointing for the inflation fighters at the Federal Reserve.

The Labor Department also revised payrolls for November and December up by a combined 100,000.

January hiring was narrow. Health care (44,000 new jobs), retail (34,000) and government (32,000) together accounted for 77% of new jobs last month. Mines shed 8,000 jobs.

The Labor Department said the Los Angeles wildfires and a cold snap in the Northeast and Midwest had “no discernable” impact on the January jobs numbers.

A federal judge on Thursday temporarily blocked President Donald Trump’s plan to push out federal workers using financial incentives.

Economists are also worried about Trump’s threats of a trade war against other countries. He’s already imposed a 10% tax on imports from China and is threatening tariffs on Canada, Mexico and the European Union and possibly, a universal levy on all imports.

Employers also worry about the economic fallout from Trump’s promises to deport millions of immigrants working in the United States.

The job market has already lost momentum. American payrolls increased by 2 million last year, down from 2.6 million in 2023, 4.6 million in 2022 and a record 7.2 million in 2021 as the economy recovered from COVID-19 lockdowns. Employers are posting fewer jobs and monthly job openings have tumbled from a record 12.2 million in March 2022, to 7.6 million in December – still a decent number by historical standards.

As the labor market cools, American workers are losing confidence in their ability to find better pay or working conditions by changing jobs. The number of people quitting has fallen from a record 4.5 million near the height of the hiring boom in April 2022, to December’s 3.2 million, which is below pre-pandemic levels.

— Associated Press