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 suggested he's inherited a solid but unspectacular U.S. labor market. January job creation was down from the 261,000 added in November, and the 307,000 created in December. Economists had expected about 170,000 new jobs in January.

Most Americans still enjoy unusual job security. But for those looking for work, the job hunt has been getting harder as the labor market cools from the red-hot hiring days of 2021-2023.

Average hourly wages rose by 0.5% from December and 4.1% from January 2024, coming in a bit hotter than forecasters had expected – news that might be disappointing to the inflation fighters at the Federal Reserve. Still, some of the inflationary pressure from wage gains is being offset by healthy U.S. productivity growth, which allows companies to pay more and earn fatter profits without raising prices.

“Employers are really maintaining their workforce, but they are not hiring significantly, nor are they laying off,’’ said Gregory Daco, chief economist at the tax and consulting firm EY Parthenon. Daco expects average job growth to slow to between 100,000 and 150,000 a month this year (down slightly from the 2024 average of 166,000 new jobs a month). “Any hiring decision is going to be judicious,’’ he said, “because the cost of talent is still elevated.’’

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

Citing the strong upward revisions from late 2024, Carl Weinberg and Mary Chen of High Frequency Economics wrote that "There is no cause for concern about the strength of the economy in today’s employment report.'' But they added that the decent hiring over the past three months suggested the Fed will be in no hurry to cut interest rates again after cutting three times in 2024.

Healthcare companies added 44,000 jobs, down from a 2024 average of 57,000. Retailers hired 34,000 workers. And government at all levels added 32,000 jobs. Mining companies 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.

The future is cloudier.

A federal judge on Thursday temporarily blocked President Donald Trump's plan to push out federal workers by offering them financial incentives, yet a federal hiring freeze that Trump imposed Jan. 20 is a “negative for employment growth,’’ Bradley Saunders, an economist at Capital Economics, wrote in a commentary last week. The freeze came after the Labor Department collected the January jobs numbers, so any impact would be revealed in upcoming employment data.

Economists are also worried about Trump’s threat to wage a trade war against other countries. He’s already imposed a 10% tax on imports from China.

Canada and Mexico – America’s two largest trading partners -- remain in his crosshairs though he gave them a 30-day reprieve from the 25% tariffs he was planning to sock them with on Tuesday, allowing time for negotiations. Trump says that America’s two neighbors and allies haven’t done enough to stem the flow of undocumented immigrants and fentanyl into the United States. Trump is also itching to slap tariffs on the European Union; pointing to America’s deficit in the trade of goods with the EU, which came to $236 billion last year, he says that Europe treats U.S. exporters unfairly.

The tariffs, which are paid by U.S. importers who generally try to pass along the cost to customers, could rekindle inflation – which has fallen from the four-decade high it reached in mid-2022 but is still stuck above the Fed’s 2% target. If the tariffs push prices higher, the Fed may cancel or postpone the two interest-rate cuts it had forecast for this year. And that would be bad for economic growth and job creation.

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 roared back from COVID-19 lockdowns. The Labor Department also reports that employers are posting fewer jobs. 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.

In regular annual revisions, the Labor Department reported Friday that job creation from April 2023 through March 2024 wasn’t as good as originally reported: 589,000 fewer jobs were created over those 12 months. Preliminary estimates, released in August, had suggested the downward revisions would be bigger — 818,000 jobs.

White House press secretary Karoline Leavitt used the jobs report revisions to say the economy during Joe Biden’s presidency “was far worse than anyone thought.” But Trump is inheriting a healthy unemployment rate and stable economy, just not one that would necessarily make him happy.

Trump is banking on tax cuts and regulatory curbs bolstering the economy. But his freezes on federal funding could halt construction projects on infrastructure and manufacturing, while his tariffs could hurt the retail sector and his spending cuts could limit hiring in the health care and government sectors.