Hiring across the US economy moderated in January, but the labor market continued to grow at a steady pace during the transition period between Joe Biden and Donald Trump’s presidencies.

New data from the labor department released on Friday showed 143,000 jobs added to the economy in January, short of the 168,000 expected by economists. The unemployment rate remained steady at a relatively low 4%, edging slightly downward from 4.1% in December.

Job growth estimates for previous months were revised higher. Employers added 261,000 jobs in November, up from 212,000; and 307,000 in December, up from 256,000.

Jobs growth was lower than initially reported in 2023 and early 2024, with 589,000 fewer jobs added than previously estimated, according to the latest revisions. This revision, while significant, was smaller than some economists had expected.

Trump is starting his second term when the labor market has cooled from its peak in 2022. Americans are now seeing fewer job openings and are changing jobs less often. There were 1.3m fewer job openings last year than in 2023, according to the Bureau of Labor Statistics (BLS).

The Federal Reserve started bringing down inflation rates in the fall, after the labor market finally showed signs of slowing down. Since then, the central bank has brought down interest rates a total of three times, but chose to keep rates steady at its last board meeting in January.

Interest rates currently sit at a range of 4.25% to 4.5%, a point down from a year ago. Inflation has been hovering above 2.5% over the last few months, down from a peak of 9.1% in 2022.

That Fed officials chose not to bring interest rates down further last month shows officials, like economists, are waiting to see the impact that Trump’s presidency will have on the economy.

The president has promised to bring down inflation and “bring up jobs”, saying at the end of January: “We’re going to have a lot of jobs. We’re going to have a lot of companies moving in.”

But many economists question the impact that his tariffs on Canada, Mexico and China will have on the US economy. Since 1 February, there is a new 10% tariff on all Chinese imports. Meanwhile, 25% tariffs on imports from Canada and Mexico are set to go into effect on 1 March, after Trump agreed to a month-long delay with leaders from the two countries.

Tariffs will increase costs for many US businesses who rely on products from the three countries, which are the US’s biggest trading partners. Trump has also floated the possibility of tariffs on the European Union and the UK.

Trump has acknowledged that the US will likely have to pay a price for such hardline trade policies but declared the pain worth it.

“WILL THERE BE SOME PAIN? YES, MAYBE (AND MAYBE NOT!). BUT WE WILL MAKE AMERICA GREAT AGAIN, AND IT WILL ALL BE WORTH THE PRICE THAT MUST BE PAID,” Trump said on Truth Social.