US jobs grow by 304,000 despite government shutdown and earnings surge

The US economy added more than 300,000 jobs in January despite the government shutdown, far ahead of forecasts.

Jobs have now grown in the US for a record 100 consecutive months, dating back to October 2010.

Despite forecasts of a further 170,000 jobs, the US labour market gained 304,000 in January, according to non-farm payroll employment figures.

Average hourly earnings also surged 3.2 per cent year-on-year.

The unemployment rate edged up to four per cent – from 3.9 per cent in December – as did the number of unemployed people, rising to 6.5m.

But the US Bureau of Labor Statistics said the increase of 175,000 people categorised as temporarily laid off included many government employees.

It added that some federal workers classified themselves as "employed but absent from work" during the month, which would not have been included in the unemployment figures.

The data comes after the US Federal Reserve decided to halt its policy of increasing interest rates.

“A tight labour market and healthy wage growth support economic growth, and today's data should buoy consumer spending and could boost the stock market,” Kully Samra, analyst at US investment bank Charles Schwab said.

“However, a string of positive data could lead the Federal Reserve to “un-pause” its rate hike cycle sooner than expected, which would likely result in volatility and pull backs.”

CME Group senior economist Erik Norland said such strong jobs growth may not continue.

He said: “It's also possible that today’s strong data will be among the last extremely strong employment reports.

“Credit spreads have widened somewhat and the yield curve has been flattening.

“This points towards a moderation in the pace of job creation going forward.”