U.S. employers added 517,000 new jobs in January, much more than expected, according to the latest employment report from the U.S. Bureau of Labor Statistics.
That’s compared with an average monthly gain of 401,000 new jobs in 2022. Most of the payroll growth came in the hospitality industry, as bars, restaurants and hotels added 128,000 positions. The unemployment rate edged down to 3.4 percent, possibly the lowest on record. Average hourly earnings rose 4.4 percent year over year.
The employment numbers follow continued efforts by the Federal Reserve to slow the economy through a series of interest rate hikes aimed at bringing down inflation. With wages moderating and inflation trending lower, economists are hopeful that the economy can normalize without falling into recession.
However, January’s surprisingly high job growth rate likely will lead to further hikes in interest rates, say economists. ,000
Note: Data is preliminary and seasonally adjusted.
Source: U.S. Bureau of Labor Statistics, Employment Situation, January 2023
What is the labor force participation rate?
Another positive: The share of adults working or looking for a job edged up o 62.4%. That’s the highest since March but still leaves it well below the pre-pandemic level of 63.4%. A larger labor supply helps ease longstanding worker shortages and puts downward pressure on wages as employers don’t need to compete as intensely for job candidates.
