January Jobs Report: US Job Growth Increases
The United States added another larger-than-expected batch of jobs last month, further proving that the economy still has plenty of strength even as fuel reserves dwindle.
Employers added 353,000 jobs in January, the Labor Department reported Friday, and the unemployment rate remained at 3.7 percent.
After losing 14 percent of the country's jobs early in the Covid-19 pandemic, the endurance of the labor market for more than three years has surprised economists, who expected factors like the Federal Reserve's rate hikes to slow hiring would slow down more sharply.
“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 prepare the most recent publications of the National Association for Business Economics member surveywhich found increasing optimism that the country would avoid a recession – consistent with a turnaround in consumer confidence measures as inflation has eased.
The new year dawned on what has been an exceptionally good economy for many workers, with the number of open jobs still exceeding the number of people looking for a job, even as new immigrants and women have joined in unexpected numbers or re-entered the workforce. Wages have risen faster than in the past, and strong increases in productivity have kept those fatter wages from fueling price increases.
Over the past year, most of the gains have come from sectors that either took longer to recover from the pandemic – including hotels, restaurants and local governments – or have outsized momentum due to structural factors such as an aging population and pent-up housing demand.
Other categories that saw super-sized growth in 2021 and 2022, including transportation, warehousing and information technology, have reverted to pre-pandemic trends. Another handful of sectors, including manufacturing and retail, were largely flat.
Economists expect the labor market to look even more like its pre-pandemic itself in the coming months, without the massive job growth that followed the pandemic lockdowns, but with few clear obstacles on the horizon.
“This year will be the year that industry composition normalizes,” said Satyam Panday, chief U.S. economist at S&P Global Ratings. “There is also always the risk that the trend remains below par. But it looks like a soft landing is increasingly in sight, at least for now.”