WASHINGTON–The new jobs report from the Labor Department crushed the forecast from many economists after 467,000 jobs were added in January.
One CU economist said the strength of the report only adds to the likelihood the Fed will raise rates when it meets again in March.
Until release of the report, many had projected a relatively weak report as a result of coronavirus cases and other factors.
Instead, employers continued to add jobs at nearly the rate they did in December, when payrolls grew by more than half a million.
"January’s jobs report surprised to the upside, as the expected bite from Omicron never materialized," said NAFCU’s chief economist, Curt Long. "Sectors like leisure and hospitality and retail, which should have been most exposed to COVID-related job losses, instead showed solid gains on the month. Although the unemployment rate ticked up, that was the result of a surge in labor force participation. This report will ease market-driven recessionary concerns and supports an aggressive tightening path for the Federal Reserve this year."
Wages Also Up
“The labor market posted strong job growth in January despite an expected, temporary setback due to surging Omicron cases,” stated CUNA Senior Economist Dawit Kebede. “Job growth was also strong in COVID-sensitive industries such as leisure and hospitality.
“The average hourly wage continued to grow in January, registering a 5.7% increase over the past 12 months. This indicates that hiring demand remains high. The labor force participation rate was also adjusted upwards, signaling that more people are rejoining the labor market after having dropped out due to COVID-related reasons.
“The low unemployment rate and increased demand for hiring show a stronger labor market, a critical factor given the expected interest rate hike by the Federal Reserve in March. It is indicative of strong consumer demand,” Kebede continued.