Unemployment Falls to 3.4%, Lowest in 53 Years, Jobs Report Shows - WSJ
S E E D E D C O N T E N T
The U.S. labor market accelerated at the start of the year as broad-based hiring added a robust 517,000 jobs and pushed the unemployment rate to a 53-year low.
January's payroll gains were the largest since July 2022 and snapped a string of five straight months of slowing employment growth, the Labor Department said Friday. The unemployment rate was 3.4% last month, its lowest level since May 1969.
Wage growth continued to soften last month, despite the strong job gains. Average hourly earnings grew 4.4% in January from a year earlier, down from a revised 4.8% in December. Annual revisions to employment and pay data suggest that wage growth has been cooling—but at a slower pace than previously thought.
The average workweek rose to 34.7 hours, the highest since March 2022.
“This is just incredibly, surprisingly strong,” said Kathy Bostjancic, chief economist at Nationwide. “Not only are you hiring more workers but the workers you have overall are working more hours. It doesn’t really get stronger than that.”
The hiring gain was well above economists’ expectations. Economists surveyed by The Wall Street Journal had expected 187,000 new jobs last month.
The report likely keeps the Federal Reserve on track to raise interest rates by another quarter-percentage point at its meeting next month and to signal another increase is likely after that. The central bank raised its benchmark rate by a quarter point this week to a range between 4.5% and 4.75%.
The Fed is trying to keep the economy growing at a slower-than-average pace to weaken demand and cool inflation. But the report Friday suggested the labor market had been even more resilient in recent months than recently reported, with the growth in average hour earnings and payrolls revised higher at the end of last year.
Stocks fell and bond yields climbed following the jobs report.
Payrolls grew in a range of sectors, including leisure and hospitality, professional and business services and healthcare. The hiring surge contrasted against high-profile corporate layoff announcements, particularly by tech companies that have cut back amid economic uncertainty.
The information sector, a category that includes technology workers, lost 5,000 jobs in January, the second straight month of declines.
Government employment increased as some workers in California returned from a strike.
David Becker, founder of Indiana-based First Internet Bank, said he was still looking to expand his staff of around 200.
“I think we’re still looking at probably another 20 to 25 employees,” he said. “We’ve got good growth, loan demand is still strong across the country.”
Despite the well-publicized layoffs of technology workers at large companies, Mr. Becker said demand is still strong in Indianapolis.
Friday’s report comes amid other indications of a tight labor market.
On Wednesday, the Labor Department said employers had 11 million job openings at the end of December, roughly 600,000 more than in the previous month. There were roughly 1.9 open jobs per unemployed worker in December, up from 1.7 in November, according to the figures.
On Thursday, the department said first-time applications for unemployment benefits fell to 183,000 last week, the lowest level since April 2022.
Other recent data paints a more mixed picture of U.S. economic health .
Consumer spending , the main driver of economic growth, is starting to falter. Manufacturing activity is declining. Price increases are easing, partly as a result of the Fed’s campaign to slow the economy to bring down high inflation.
The economy grew 1% in the fourth quarter of 2022 compared with a year earlier, down sharply from 2021.
The list of companies announcing layoffs has also continued to grow. FedEx Corp., Rivian Automotive Inc. and Okta Inc., a business-software firm, all announced layoffs this past week.
A key consideration for Fed officials will be whether wage increases continue to cool. Officials have worried that rapidly rising wages could push up inflation, which could force them to raise interest rates more aggressively.
Earlier this past week the Labor Department said growth in wages and benefits moderated in the fourth quarter.
Brittany Smith, founding partner of Wealth Partners Alliance, a wealth-management firm in Dallas, said she has seen a shift in the expectations of job applicants.
“A year ago, whenever we were interviewing, the applicants seemed to have the upper hand. They wanted the work-from-home flexibility, they wanted higher compensation, and they were less qualified,” she said. “Now I’m seeing lower compensation, similar qualifications, with less restrictions.”
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The president just said that he is willing to take questions on this "jobs report" and nothing else:
"President Joe Biden on Friday declined to answer questions about the detection of a Chinese surveillance balloon over Montana as he hailed the addition of 517,000 new jobs to the US economy last month as “good news” that puts his economic record ahead of any other US president.
Speaking from the White House Friday morning, Mr Biden told reporters he wouldn’t answer questions about anything other than the Labor Department report because doing so would keep reporters from writing about the positive jobs numbers."
Of course he would not answer about the Chinese spy balloon. He only had preprepared script cards for the labor statistics!
He was sure to say the wrong thing on that. I guess that's why they keep him on a tight leash
Yep.
Lol. his brain can't remember more than one script.
He also mananged to tell a massive lie even limiting himself as he did.
He claimed he's not responsible for inflation because "It was already there when I got here, man!"
Inflation was at 1.4% when he got there.
That's right!
How did he get here?
The same way all the other leaders and economies did.
Talk about trying to control the narrative and not inform people about anything they don't want them to know about. How putin of him.