The U.S.economy added 467,000 jobs in January even as the omicron variant spiked to record heights, showing that the resilient labor market had enough momentum to power through one of the pandemic’s biggest surges.
The unemployment rate ticked up slightly to 4 percent, from 3.9 percent the month before, because more people were looking for work, another positive trend.The monthly report, released by the Labor Department, stems from a survey taken in mid-January, around the time the omicron variant was beginning to peak.The rapid spread during that period upended many parts of the economy, closing schools, day cares and a number of businesses, and forcing parents to scramble.But the labor market, according to the new data, performed very well during that stretch.Over the past 12 months, the United States has added nearly 7 million jobs as workers have found ample openings in an economy still recovering from the pandemic’s first days.“America is back to work,” President Biden said Friday at the White House.“Our country is taking everything that covid has had to throw at us, and we’ve come back stronger.… America’s job machine is going stronger than ever.”He said the report spoke to the “extraordinary resilience and grit of the American people.
And American capitalism.”There are a number of forces pressing simultaneously on the U.S.economy.The labor market and economy have grown rapidly in the past year despite the pandemic’s delta and omicron variants, but rising inflation has caused a number of problems for businesses and households.
Biden acknowledged these challenges Friday and pledged to keep trying to address them.The stock market, meanwhile, was strong in 2021 but has faced major head winds in recent weeks as the Federal Reserve prepares to raise interest rates.Some technology stocks have slumped markedly.The three major U.S.stock indexes all rose Friday in midday trading, with the tech-heavy Nasdaq jumping in part based on a strong earnings report from Amazon.
In addition to the robust January, the Labor Department also more than doubled its tabulations of jobs gains for November and December.The U.S.economy added 647,000 in November, not the 249,000 the agency had earlier estimated.And the economy added 510,000 jobs in December, the Labor Department said, not the 199,000 initially forecast.That means there were some 700,000 more jobs added at the end of last year than previously estimated, with employers working aggressively to draw in workers across a range of industries.“There’s all kinds of good news that suggests people are getting back to normal,” said Drew Matus, chief market strategist for MetLife Investment Management.“In the big picture, it’s a very encouraging report.
People returning to the workforce is what you wanted to see, and the gains were pretty widespread across different groups.The most important thing is people want to get back to work, and they’re trying to get back to work.”Average hourly earnings increased by 23 cents on the month to $31.63, up 5.7 percent over the last year.
It was the largest monthly increase in the last year, Matus said.However, those gains for many people have largely been wiped out by rising prices for a range of goods — a chief concern for central bankers and policymakers at the moment.To beat back rising prices, the Federal Reserve is preparing for interest rate hikes this year, convinced that it has given enough support to help the labor market and must work to keep the economy from overheating further.The jobs report may lend urgency to that push, Matus said.The labor market absorbed a devastating blow in March and April of 2020, when more than 20 million workers lost their jobs at the onset of the pandemic.New outbreaks and variants have sent shock waves through the economy since then, but the labor market has continued to rebound, with companies working to add jobs and wages steadily rising.The industries experiencing growth in January were led by the leisure and hospitality sector, which added 151,000 jobs, mostly in restaurants and bars.Professional and business services added 86,000 jobs.
Retailers added 61,000 jobs in January, which is typically an off month.
Transportation and warehousing added 54,000 jobs.The labor market participation rate, a critical measurement that has suffered from people leaving the workforce during the pandemic, also went up significantly, to 62.2 percent from 61.9 percent.That shows more people are looking for work.Those numbers were led by Black workers, specifically Black women, whose participation rate jumped eight-tenths of a percentage point for the month, to 61.9 percent.“I don’t think anybody would dispute that we’re moving in the right direction,” said Valerie Wilson, labor economist at the left-leaning Economic Policy Institute.“That being the case, as we often see, there are pretty significant differences in terms of the pace of recovery by race and ethnicity.”Democrats and administration officials such as Labor Secretary Marty Walsh hailed the report Friday.“With labor force participation up over the year and long-term unemployment continuing to decline, America is getting back to work,” Walsh said in a statement.The data was collected during a tumultuous period.
Nearly 9 million workers were out sick around the time the survey was taken , and some of them could have been counted as unemployed based on the way the survey is conducted.January is traditionally a weak month for employment, as retail and other industries shed jobs after the holiday season.Economists say seasonal adjustments made to the survey’s data to account for this have the potential to distort the survey in the other direction, given that the holiday shopping boom appeared to take place earlier this year than is typical.As such, predictions for job growth for the month had been all over the map.Analysts surveyed by Dow Jones forecast an average of about 150,000 jobs added for the month, in what would have been the lowest number added in a year.Many economists predicted job losses, some of up to 400,000.Last year was a strong year for growth in the labor market, with the country adding an average of more than 550,000 jobs a month — regaining some 6.5 million jobs lost in the pandemic’s earlier days, after the department revised its numbers.The country has about 2.9 million fewer jobs than it had before the pandemic, according to the figures released Friday.Still, federal officials are battling a perception problem, as large numbers of Americans report being dissatisfied with the economy .Long-standing inequities exposed by the pandemic linger, too.The Black unemployment rate declined by 0.2 percent in January, to 6.9 percent, but it remains double the 3.4 percent level for White workers.Some economists like Matus say the prospects for such rapid regrowth are more complicated this year.The fiscal measures that boosted the economy during the pandemic’s first two years, such as generous government aid and record-low interest rates from federal bankers, have largely expired, and the country’s confidence in a virus-free future has been dented after the winter wave.Recent months have continued to be marked by incredible churn in the labor market, as record numbers of workers switch jobs.In December, some 4.3 million people quit or changed jobs — a number that was down from an all-time high in November but still elevated.
Employers continue to report near-record numbers of job openings: The Bureau of Labor Statistics said they reported some 10.9 million openings last month.Rachel Siegel contributed to this report..
