US adds stunning 517K jobs to start 2023
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The U.S. labor market clocked a shockingly strong month in January, adding 517,000 jobs and dipping down to 3.4 percent unemployment, according to data released Friday by the Labor Department.
The numbers blow past expectations. Analysts were projecting an increase around 185,000 jobs and for the unemployment rate to edge up to 3.6 percent. In December, the unemployment rate dipped back down to 3.5 percent and added 260,000 new jobs, according to revised figures released Friday.
The gain of 517,000 new jobs tops the monthly average gain of 401,000 for 2022, a year that already had outsized job growth.
Growth was strongest in the sector of leisure and hospitality, which added 128,000 new jobs compared to a monthly average of 89,000 in the sector last year.
The data also showed that average hourly earnings rose by 0.3 percent, or 10 cents, to $33.03 an hour as wage pressures in the economy continued to moderate. Over the past 12 months, earnings have increased by 4.4 percent, compared with 4.6 percent as measured last month.
Wage growth, while still well above pre-pandemic levels, has now slowed to lowest annual rate since July 2021. Lower wage growth coupled with stellar job gains and low unemployment is a strong sign for the Federal Reserve as it attempts to quash inflation while avoiding a recession.
Prices were up 6.5 annually in December, according to the Labor Department’s consumer price index (CPI).
The January jobs number is subject to an annual population correction by the Bureau of Labor Statistics that may have influenced the data. Due to the correction, the December and January jobs numbers are not directly comparable, and some economists have been putting up warning signs about this.
“Not to be too negative here, but I really don’t believe 500K. Would bet non-trivial measurement error there,” Adam Ozimek, an analyst with advocacy organization Economic Innovation Group, wrote online after the release of the data.
The numbers come after a strong report on jobs openings from the Labor Department earlier in the week, showing a jump of 5.5 percent in December to more than 11 million open jobs.
The ratio of job openings to unemployed workers jumped back up to a near-record of 1.9, meaning that there are nearly two job openings in the U.S. for every job seeker.
Updated at 9:08 a.m.
Source: TEST FEED1
