Kathleen Brooks, research director at XTB, says:

January job creation could have been impacted by the fires in California and from uncertainty caused by the change in administration in the US.

President Trump’s tariffs and his new economic policy could have meant that employers sat on the sidelines in January, and we will need to see if that continues this month.

In a boost to US workers, average hourly earnings rose 0.5% in January, faster than the 0.3% recorded in December.

While that will please employees, it won’t encourage the US Federal Reserve to cut interest rates more quickly.

Today’s jobs report says:

In January, average hourly earnings for all employees on private nonfarm payrolls rose by 17 cents, or 0.5 percent, to $35.87.

On an annual basis, wages increased 4.1% in the 12 months to January.

Newsflash: Job creation across the US has slowed at the start of Donald Trump’s second term, after a blistering finish to 2024.

US non-farm payrolls rose by 143,000 in January, new data from the Bureau of Labor Statistics shows. That’s weaker than the 170,000 new jobs expected last month.

It’s also a sharp slowdown on December, where the BLS has revised up its estimates and now says payrolls rose by 307,000, 51,000 more than its initial estimate of 256,000.

The US unemployment rate edged down to 4.0% in January, the BLS says, adding:

Job gains occurred in health care, retail trade, and social assistance. Employment declined in the mining, quarrying, and oil and gas extraction industry.

The Bank of England’s chief economist, Huw Pill, has welcomed signs that pay growth is slowing, but warned that it’s too early to claim victory over inflation.

Speaking to the Bank’s agents on a video call today, Pill says that the Bank now expects average earnings to rise by 3.7% this year. A year ago, it forecast 5.3% – a prediction that proved accurate.

Pill (who got in hot water two years ago for saying Britons ‘need to accept’ they’re poorer) says this fall in pay growth shows that there is an ongoing, successful, process of disinflation underway.

That process of disinflation helped the Bank to cut interest rates yesterday.

Pill adds, though, that pay growth of 3.7% is higher than the Bank expected a few months ago – and cautions that the pace of disinflation may not be not quite as strong as that we had previously thought.

He warns:

That means that we’re not in a situation where we can declare job done.

Pill adds that the Bank still needs to maintain some restrictions to its monetary policy stance, to squeeze out remaining persistent domestic inflation pressures, to bring inflation down to the 2% target.

Mortgage borrowers were handed a boost by the Bank of England’s decision yesterday, but none more so than households who had been unlucky enough to remortgage in the period of sky-high borrowing costs around the time Liz Truss was prime minister.

The Bank says more than a quarter of mortgage accounts are expected to see monthly payments decrease between December 2024 and the fourth quarter of 2027. That’s equivalent to about 2.4 million mortgages which had been taken out at higher fixed rates than are currently available.

Figures from the data provider Moneyfacts show the average 2-year fixed residential mortgage rate today is 5.49%, down slightly from the 5.50% available yesterday as the Bank cut its key base rate from 4.75% to 4.5%.

However, that’s down from levels above 6% in late 2022 after the former prime minister’s ill-fated mini budget blew up the bond market.

Mortgage rates depend on financial market expectations for the Bank’s base rate – influenced by the outlook for economic growth and inflation – but also high street lenders appetite for risk and competition.

Millions of mortgage borrowers are still, though, facing a hike in their monthly repayments. The latest data in the Bank’s monetary policy report, published yesterday, shows about half of mortgage accounts – 4.4 million – are due to reprice onto higher rates between December 2024 and the fourth quarter of 2027.