January Jobs Report: 517,000 Jobs Added and Unemployment Falls to Lowest Level Since 1969
By The Bureau of Labor Statistics' most recent report revealed that employers added 517,000 jobs in January, and the unemployment rate dropped to 3.4%, its lowest since 1969.[0] Gains were seen in various sectors, indicating job growth was widespread.[1] In other economic news, job openings increased in December and weekly unemployment claims remain low.[2] In the fourth quarter of 2022, the US economy experienced an unexpected surge in growth.[2]
The Bureau of Labor Statistics' January jobs report revealed a total nonfarm payrolls increase of 517,000, substantially higher than the 401,000 average monthly gain observed in 2022 and the FactSet consensus prediction of about 190,000 for January.[3] Hourly wages increased by an average of 0.3%, the same as the monthly rise in December.[4] In January, wages increased by 4.4% on a yearly basis, a slightly lower rate compared to the 4.6% from December. The percentage of people in the labor force increased to 62.4%.[5]
The likelihood that the Federal Reserve will increase the interest rate by a quarter percentage point at their March meeting has risen to 94.5%, according to information from CME Group, as traders have increased their wagers.[6] It is anticipated that the Federal Reserve will raise the benchmark funds rate to a range of 5%-5.25% in either May or June.
Most economists, even those who had denied a recession was near, were stunned by Friday's jobs report strength.[7] There are approximately 11 million job openings, representing a ratio of 1.9 job openings per person looking for employment.[8]
Federal Reserve Board Chairman Jerome Powell spoke at a news conference on February 01, 2023 in Washington, DC.[9] Kevin Dietsch/Getty Images is the photographer of[5] His comments followed the Fed’s announcement of a .25% increase to its inter-bank lending rate, the eighth consecutive rate hike going back to March of last year and a continuation of the Fed’s most aggressive strategy for decades.[10] The benchmark rate has increased from close to 0% in the beginning of 2020 to 4.5% to 4.75%, which is the highest it has been since 2007.[10]
An even more surprising factor of the January jobs report was the lack of wage pressures. Caldwell reported that wages have increased at an average annual rate of 4.6% over the last three months.
0. “Jobs growth surges in US despite slowdown fears” BBC, 3 Feb. 2023, https://www.bbc.com/news/business-64514466
1. “Gold prices taking a hit after U.S. economy added 517K jobs in January” Kitco NEWS, 3 Feb. 2023, https://www.kitco.com/news/2023-02-03/gold-prices-taking-a-hit-after-U-S-economy-added-517K-jobs-in-January.html
2. “How is the economy doing? Kind of good, actually.” Vox.com, 8 Feb. 2023, https://www.vox.com/the-goods/2023/2/3/23584939/jobs-report-economy-federal-reserve-inflation-recession-jay-powell
3. “Hot January Jobs Report Presents Puzzle for Investors” Morningstar, 3 Feb. 2023, https://www.morningstar.com/articles/1135270/hot-january-jobs-report-presents-puzzle-for-investors
4. “Jobs Report: Hot Hiring, Lower Jobless Rate Lift Fed Rate-Hike Odds; S&P 500 Falls” Investor's Business Daily, 3 Feb. 2023, https://www.investors.com/news/economy/jobs-report-hiring-surges-as-jobless-rate-falls-sp-500-futures-lower/
5. “Jobs report: U.S. economy adds 517,000 jobs in January, unemployment rate falls to 3.4% as labor market stuns” Yahoo News, 3 Feb. 2023, https://news.yahoo.com/january-jobs-report-labor-market-economy-february-3-2023-125436675.html
6. “Tesla Hikes Model Y Prices As U.S. Changes $7500 Tax Credit Rules” Rockdale Newton Citizen, 6 Feb. 2023, https://www.rockdalenewtoncitizen.com/arena/tesla-hikes-model-y-prices-as-u-s-changes-7-500-tax-credit-rules/article_51c0648d-6a50-5fb0-b657-4682b4bd5e58.html
7. “Now hiring: Despite layoff headlines, there are still plenty of jobs in this economy” NBC News, 3 Feb. 2023, https://www.nbcnews.com/business/economy/now-hiring-where-are-the-jobs-right-now-economy-rcna68783
8. “Why Forecasts Fail: 4 Must-Have Lessons For Every Investor” HerMoney, 7 Feb. 2023, https://hermoney.com/earn/job-hunting/how-did-forecasters-get-it-so-wrong-what-investors-need-to-take-away-from-the-january-jobs-report/
9. “Why did we get a monster jobs report if the economy is slowing?” CNN, 4 Feb. 2023, https://www.cnn.com/2023/02/04/economy/strong-jobs-report-weakening-economy-analysis/index.html
10. “Jobs report blows by expectations, ratchets up inflation fight” Deseret News, 3 Feb. 2023, https://www.deseret.com/2023/2/3/23584433/jobs-report-exceeeds-expectations-amid-inflation-lowest-unemployment
