The US Administration’s shutdown in January pushed up the US unemployment rate but did not dampen the dynamism of the labour market, where hiring was still high.

The unemployment rate rose by a tenth of a percentage point to 4% last month, at its highest level in seven months, mainly due to the forced unemployment of thousands of civil servants during the shutdown budget impasse, according to Labour Department figures released on Friday.

However, the labour market remained very dynamic with 304,000 new jobs created, a record high in the last year.

The US economy created an impressive number of jobs in January, well beyond our projections,” Oxford Economics economists said.

These massive new hires seal the record for 100 consecutive months of job creation,” said Chris Low of FTN Financial.

Nevertheless, the Ministry has significantly reduced the December job creation rate to 220,000 (-90,000).

On average over the past three months, the U.S. economy has created 241,000 monthly jobs.

The partial closure of the administration, which lasted 35 days, did not affect the survey of companies that count hires.

Federal public servants remain counted as employees even if they have not worked or have worked without being paid.

“It is likely that some private sector industries have suffered from the shutdown but we are not able to quantify this impact,” the ministry writes.

In contrast, in the household unemployment rate survey, the number of “temporary removals” increased by 175,000 last month and helped to raise the unemployment rate to 4% for the first time since June.

The number of unemployed has risen from 241,000 to over 6.5 million. “The impact of the partial closure of the administration has contributed to the increase in these figures,” the ministry admits.

As a result of the administrative paralysis, part-time employment jumped by half a million to 5.1 million, the highest since September 2017.

“All these jobs have occurred in the private sector and probably reflect the impact of the shutdown,” the Labour Department still admits, while unemployed civil servants have had to look for temporary jobs.

Among the good news, the labour market participation rate increased further to 63.2%, its highest level since September 2013. This generally reflects confidence in the economy as more people work or seek work.

The leisure and hotel sector was the most popular employer, followed by the building sector, which enjoyed mild weather in January, and the health sector.

In total, the service sector, by far the largest employer, created 224,000 jobs while the goods-producing sector created 72,000, which is still the best performance in 11 months.

Some 13,000 new hires were made in the manufacturing sector, slightly less than in November.

The average hourly wage increased slightly, advancing only 0.1% (3 cents), while analysts projected +0.2%, after a more substantial increase in December (10 cents).

Regarding the Central Bank (Fed), which has just announced that it is taking a break from rate hikes due to the global economic slowdown and trade uncertainties in the United States, the insolent vitality of job creation could make it think again. “This certainly opens the debate,” notes Chris Low.

For Gregory Daco of Oxford Economics, “this leaves room for the Fed’s patient approach, but it also suggests that by being flexible and attentive to the data, it retains the possibility of raising rates in 2019.