America’s job market momentum may slow down soon.
The Labor Department publishes the January jobs report at 8:30 a.m. Friday. Economists surveyed by CNNMoney project that the economy added 197,000 jobs last month. That would be way down from December, when the economy added 292,000 jobs.
The unemployment rate is projected to stay steady at 5%, where it has been since October.
The job market has been a bright spot in an economy that’s lately flashed several warning signs.
U.S. economic growth was a mere 0.7% in the fourth quarter.
The manufacturing sector has contracted for four straight months; spending on construction projects is declining; and American companies are hurting. The broad S&P 500 is down 6.2% this year.
Another key measure of the labor market has been weak: The 4-week average of people filing for unemployment claims has increased since October, meaning more people are out of work. This usually foreshadows future monthly job losses.
Still, December’s addition of 292,000 jobs was robust. If the pace slows a little and the country adds about 200,000 jobs, that’s pretty healthy too. Unemployment is very low. For many economists, a 5% rate is considered full employment.
Plus, some worry if job growth continued at its strong pace in 2015, it could lead to inflation rising faster than expected, forcing interest rates to go up rapidly. Fast-climbing rates can cool down business and consumer spending — the engine the U.S. economic growth.
Despite those concerns, if the surveyed economists are right, the job market is still adding a healthy number of jobs — just at a slower pace.
Wage growth too has shown momentum recently. Last fall, wages started rising a little, growing back to 2009 levels.
Wage growth has been the one factor missing from America’s recovery from the recession. As the unemployment rate remains low, wage growth is expected to gain more ground in 2016.