The United States generated a much larger number of jobs than expected last month, adding more evidence that the economy still has plenty of momentum.
Employers added 353,000 jobs in January, the Labor Department reported Friday, and the unemployment rate remained at 3.7 percent.
After the loss of 14 percent of the country’s jobs early in the Covid-19 pandemic, the resilience of the labor market for more than three years has surprised economists, who expected that factors such as increases in unemployment rates interest from the Federal Reserve will slow hiring more sharply. Friday’s strong data is likely to bolster the Federal Reserve’s patience to begin cutting rates.
“Layoffs are happening, but workers can find new jobs,” said Sara Rutledge, an independent economic consultant. “It’s almost like a ‘pinch me’ scenario.”
Ms. Rutledge helped tabulate the latest report from the National Association for Business Economics. member surveywhich found growing optimism that the country would avoid a recession, coinciding with a shift in measures of consumer confidence as inflation has eased.
January’s growth was even more impressive added to the upward revisions of the previous two months, which raised the average monthly employment increase in 2023 to 255,000. Professional and business services accelerated to 74,000 jobs, while healthcare added 70,000. The only major sector that lost jobs was mining and logging.
The bumper crop of added jobs, nearly double what forecasters expected, reflects the equally surprising strength in gross domestic product measures for the fourth quarter of 2023.
Average hourly earnings also grew rapidly, up 0.6 percent from December, although that may have to do with a shortening of the work week and the addition of so many white-collar workers, who tend to make more money. Hotels and restaurants, where wages are lower, eliminated a few thousand jobs.
Agron Nicaj, a U.S. economist at banking and financial services firm MUFG, noted that job postings had increased in professional and business services in recent months. That may mean the January surge will be short-lived.
“I wouldn’t expect a reacceleration because of the relationship with the industries that grew this month and the openings,” Nicaj said. “I think this month reflects a turnover of jobs that they couldn’t fill.”
The new year dawned with what has been an exceptionally good economy for many workers, with the number of open jobs still exceeding the stock of job seekers, even as new immigrants and women have entered or reentered the workforce. in unexpected quantities. Wages have been growing faster than their historical rates, and strong productivity growth has helped prevent those higher wages from driving price increases.
Over the past year, most gains have been driven by sectors that were slower to recover from the pandemic (including hotels, restaurants and local governments) or that saw a huge boost due to structural factors, such as aging demographics and demand. repressed housing.
Other categories that saw tremendous growth during 2021 and 2022, including transportation, warehousing and information technology, have returned to their pre-pandemic trends. Another handful of sectors, such as retail, have remained largely stable.
Despite high-profile layoff announcements at companies like UPS, Google and Microsoft, across the economy employers have been reluctant to let go of their workers, worried about being left short-handed if business picks up again.
In the coming months, economists expected the labor market to become even closer to what it was before the pandemic, without the gigantic job growth that followed pandemic lockdowns. The latest figures may call that assessment into question.
Even the manufacturing sector, which has been in a mild recession for about a year, added 23,000 jobs. This reflects optimism in recent Purchasing Managers Index for Manufacturing Industry, which jumped unexpectedly last month. Timothy Fiore, chairman of the Institute of Supply Management committee overseeing the survey, said it seemed like the beginning of a turnaround, albeit a slow one.
“Now we’re starting to gain altitude,” Fiore said. “It is not a gain for a fighter pilot; It is a cargo plane profit.”
