WASHINGTON (TNND) — Average hourly wages increased 4.1% over the past 12 months, faster than the rate of inflation, according to the Labor Department's January jobs report out Friday morning.

In January alone, nonfarm hourly earnings rose an average of 17 cents, or 0.5%.

Following a substantial period of high inflation, former Bureau of Labor Statistics Commissioner Dr. Erica Groshen, now a senior economics advisor at Cornell University, said wages are playing catch-up.

"Inflation rose faster and before wages and so you kind of expect a period of time after inflation starts to come down that wage increases are higher than inflation to kind of bring things back to where they were. This is particularly true for people who are under contract, like unionized workers," Groshen said.

Last month, the economy added 143,000 jobs, according to the report, which was fewer than expected. The unemployment rate ticked down slightly to 4%.

Groshen took notice of an uptick in cuts to temporary jobs.

"I always watch that carefully because that can be a harbinger of job losses, permanent job losses down the road," Groshen said.

Sectors that saw the most job gains last month were health care, retail trade, and social assistance. Mining, quarrying, and the oil and gas extraction industry shed the most positions.

"Looking ahead, the labor market remains on uncertain footing. A stronger consumer is keeping parts of the economy afloat, but high interest rates continue to drag on investment and production. If hiring in goods-producing sectors remains flat, job growth will depend on continued strength in consumer-facing industries," said ZipRecruiter chief economist Julia Pollak.

Further uncertainty for the labor market looms in the new Trump administration's plans for mass deportations. Immigration and Customs Enforcement made more than 8,000 arrests in the first two weeks. On Friday, CNN reported the White House has pressured ICE to increase its pace of arrests.

“That could constrain output going forward. That will change the nature of the labor market," Groshen said.

One industry that would be hit particularly hard is construction, at a time when shelter is a top driver of inflation.

Troup Howard, an assistant professor at the University of Utah School of Business's Marriner S. Eccles Institute for Economics and Quantitative Analysis co-authored a study with economists Mengqi Wang of Amherst College and Dayin Zhang of the University of Wisconsin-Madison that found deporting migrant construction workers would drive up home prices.

“Say two jobs get vacated because workers are removed from the country. One of those jobs is going to be filled by an American, the other one doesn’t get filled,” Howard said. “The more casual way of saying that is you need someone to come in and frame the house before you need the relatively higher skilled plumbers and electricians to come in and finish the house.”