Usa News World News
January jobs report: US economy added 517,000 jobs last month
Minneapolis
CNN
—
The US economy added 517,000 jobs in January, showing that the labor market is not yet ready to calm down.
The unemployment rate has fallen to 3.4% from 3.5%, reaching a level not seen since May 1969 – two months before Neil Armstrong walked on the moon – according to new data released Friday by the Bureau of Labor Statistics.
Economists expected 185,000 jobs to be added last month, based on consensus estimates on Refinitiv.
“With 517,000 new jobs added in January 2023 and an unemployment rate of 3.4%, this is a hit report showing that the job market is more like a high-speed train,” said Friday.Becky Frankiewicz, President and Chief Commercial Officer of ManpowerGroup.
The shocking monthly job growth — a figure that several economists said was influenced by seasonal factors and is subject to future revisions — bucks a five-month trend of moderating job growth.employment in the second half of 2022.
“The meteoric rise of 517,000 in total employment was almost certainly a function of seasonal noise and the traditional rolling of the employment and wage environment at the start of the year and exaggerates what is already a robust trend in when it comes to hiring,” Joe Brusuelas, senior economist and chief at RSM US, said in a statement.
Still, a report’s juggernaut may cause complications for the Federal Reserve, which is trying to rein in high inflation with higher interest rates, said Seema Shah, chief global strategist at Principal Asset Management.
“East [Fed Chair Jerome] Powell now wonders why he didn’t push back on easing financial conditions? Shah said in a statement.“It’s hard to see how wage pressures can possibly ease enough when job growth is this strong, and it’s even harder to see the Fed stop raising rates and entertain ideas of lower rates.rate as such explosive economic news arrives.”
“The market is going to be on a rollercoaster ride as it tries to decide if this is good or bad news.
For now, however, it looks like the US economy is doing perfectly well.“, she said.
Yet the report also showed that wage growth moderated on a year-over-year basis: average hourly earnings fell 0.4 percentage points to 4.4% year-over-year.
Monthly wage gains remained stable at 0.3%.
“It is quite remarkable to see such a realignment of the employment picture coincide with an easing of wage pressure,” Mark Hamrick, senior economic analyst for Bankrate, said in an interview.“I think that could be part of this report that could help reduce blood pressure among Federal Reserve officials in the short term.”
In addition, average weekly hours fell from 34.3 to 34.7 hours, and employment in temporary help services rebounded after two months of decline, indicating new labor demand, a noted Julia Pollak, chief economist at ZipRecruiter.
The report also showed an increase in the closely watched labor force participation rate to 62.4% from 62.3%.However, the increase in the proportion working or looking to work was a function of the BLS’s annual benchmark revisions to its household survey, one of two surveys that are considered in the monthly jobs report., noted the chief economist of the PNC, Gus Faucher.
Without the revisions, that number would have remained unchanged at 62.3%, he added.
“The labor market is structurally tighter after the pandemic,” he said.
Each January, the BLS makes revisions to its employment data to reflect updated demographic estimates and other factors.
“On the net, you’ve seen stronger hiring in 2022 than originally reported,” Sarah House, chief economist at Wells Fargo, told CNN.
Average monthly job growth in 2022 has been revised upwards from an average of 375,000 per month to 401,000, she said.
Seasonality issues aside, other trends are lining up to support a strong jobs report in January 2023, Bankrate’s Hamrick said.
“When you have a number of things pending, almost like a crime scene investigation, it tends to give that credibility issue some credence,” he said of the job gains.surprising half a million more.“What are the things that line up? The remarkably low level of unemployment insurance claims, the increase in job offers, the increase in labor force participation.
Gains were also broad-based across sectors, with job growth led by leisure and hospitality, professional and business services, and healthcare, according to the BLS report.
Industries that lost jobs last month included motor vehicles and parts (down 6,500 jobs), utilities (down 700 jobs) and information (down 5,000 jobs).
In recent months, announcements of mass layoffs — particularly from Big Tech — had raised concerns that the cuts were a harbinger of broader cuts to come.
That doesn’t appear to be the case, given that jobless claims have remained historically low, job openings haven’t dwindled and job gains remain solid, said economist Giacomo Santangelo.at Monster.
“The news is about big names laying off, but we don’t really hear what’s happening in small businesses with less than 200 employees,” he said.
“What we’re seeing at Monster is that a lot of companies, a majority of companies, are looking to hire.”
The glut of jobs available – there are 1.9 vacancies for every job seeker – coupled with skills that are in high demand means workers are likely to find jobs quickly, he said.Additionally, people laid off by big tech companies likely received generous severance packages, so not all of them are claiming unemployment benefits.
Friday’s report showed the median duration of unemployment was 9.1 weeks, just slightly above the pre-pandemic level of 8.9 weeks in February 2020.
Cnn All.
